The Energy Regulatory Commission (ERC) said the power reserves market will only resume with price caps in place.
Monalisa Dimalanta, ERC chair, told reporters in a forum in Taguig City on Wednesday it may take some time to have a definitive decision as the regulatory body got over 100 comments from various sectors on the proposed price caps.
“We received a lot of comments, it looks like it will be a long discussion which may impact on the timeline also for the resumption of the reserve market because we definitely want the resumption to happen only when we have the offer floor and price cap. We will not resume this (reserve market) without those elements in place,” Dimalanta said.
The ERC conducted public consultations on the said issue yesterday.
Last month, the ERC issued a draft resolution setting an interim price cap as mitigating measure for the trading of power reserves at the Wholesale Electricity Spot Market (WESM).
The ERC sought comments for the proposal which will introduce a floor price of P0 per megawatt hours (MWh) and a ceiling price of P19,000 per MWh for trading power reserves.
The floor and ceiling prices will be reviewed and recomputed after a year of its implementation, contingent on the collection of sufficient data from the annual submissions of generation companies.
To come up with sufficient data to adjust price caps accordingly, the ERC also ordered power generators to submit their plant economic life years; project cost; annual sales generation; fuel cost; variable operations and maintenance cost; fixed operations and maintenance cost; weighted average cost of capital; and plant utilization factor.
The energy reserves market was suspended by the ERC last March as its operations became a factor that pushed power rates.
The energy reserves market is the platform where power generators offer their capacities for ancillary services (AS) which is being purchased by the National Grid Corporation of the Philippines.
AS serve as the available generating capacity for dispatch to meet contingency reserve requirements when a power generating unit trips or a transmission interconnection problem occurs.
NGCP said before that AS is also necessary for the company to manage power fluctuations to ensure the quality and reliability of power flowing through its system as if not managed properly, fluctuations can cause damage to sensitive equipment or lead to automatic load dropping and even pose a danger to the transmission system as a whole if severe.
However, last May, the ERC partially lifted the suspension on settlement amounts in the reserve market to allow power generators partial recovery of costs for trading transactions for the March billing month of this year.
The move allowed power generators to recover an initial P1.7 billion or 30 percent from the total P5.7 billion.
Generators are yet to charge the remaining P4 billion to consumers pending an order from the ERC.
