THE Wholesale Electricity Spot Market (WESM) tripartite committee will likely extend the P32-per-kilowatt-hour (kWh) price cap to continue shielding consumers from any sudden price spike.
Philippine Electricity Market Corp. (PEMC) President Melinda L. Ocampo said during the Ninth WESM annual meeting held on Thursday that some industry stakeholders want to extend the price cap.
“There were consultations held in Luzon and the Visayas, and some want it to be extended. We will still take this up in our next meeting,” Ocampo said, adding that the price cap “can be extended.”
The PEMC, which operates the WESM, is a member of the committee. The other members are the Department of Energy (DOE) and the Energy Regulatory Commission (ERC).
The P32-per-kWh price cap was reduced from the original P62 per kWh in December 2013, following the record-high prices posted by the Manila Electric Co. (Meralco).
The implementation of the price cap has been extended since “pending the determination of a new WESM offer price cap.”
“Following the isolated incidents of November to December 2013, the WESM tripartite committee implemented an offer price cap of P32 per kWh starting January 2014, in an effort to temper the significantly high prices in the electricity spot market,” the PEMC said in a statement.
“Since the primary price cap could not fully capture incidents of sustained clearing of high spot prices, a secondary price-cap mechanism was put in place by the ERC as a preemptive measure to help limit recurring occasions of high prices in the WESM,” PEMC said.
A secondary price cap of P6.245 per kWh is triggered once the P9-per-kWh threshold is breached.
“The PEMC is resolved to fully realize the objectives of the Epira [Electric Power Industry Reform Act] in promoting transparency in electricity pricing and provide a level playing field to all electric power industry participants.
With the robust enforcement and compliance framework present in the spot market, we assure everyone that competition thrives in the market where all players are encouraged to abide with the WESM rules,” Ocampo said.
Low market prices were observed from mid-September to December 2014, because of the decrease in demand brought about by colder temperatures. Likewise, low prices were also observed from March 2015 to mid-May 2015, because of increase in supply when generating plants on scheduled maintenance outage went back online, offsetting the unavailability of Malampaya natural-gas facility.
“The PEMC is relentless in its efforts to ensure that the WESM will work for every Filipino in achieving a reliable and affordable supply of electric power,” Ocampo said.