A tripartite committee of the Wholesale Electricity Spot Market will continue to implement the P32 per kilowatt-hour offer price cap, which has helped temper price volatilities in the spot market.
Philippine Electricity Market Corp. president Melinda Ocampo told reporters the secondary price cap at the WESM, the country’s trading floor of electricity, would also remain.
“Actually, it’s already permanent but there is a colatilla that there will be a continuing review. There is a provision that there will be a review so depending on the situation, they will look at it,” Ocampo said.
PEMC, the Energy Regulatory Commission and the Energy Department are members of the WESM tripartite committee.
The ERC earlier issued a resolution adopting and establishing a pre-emptive mitigation measure in the WESM once the P9 per kWh threshold is breached.
ERC said a breach in the P9 per kWh cumulative price threshold over a seven-day period triggers an imposition amounting to P6.245 per kWh.
Both the P32 price cap and the secondary price cap were implement following the unprecedented increase in power rates in November and December 2013 as a result of arising from the Malampaya natural gas shutdown.
The tripartite committee reduced the interim offer price cap to P32 per kWh from P62 per kWh following the 30-day Malampaya shutdown.
The market clearing price at that time reached the maximum offer of P62 “more often than usual and even during off-peak hours when demand for electricity is low.”
The tripartite committee was created in 2006 to coordinate efforts in the monitoring of price volatilities and setting of mitigation measures during the initial years of the WESM implementation.
The committee convened shortly after the November-December rate issue in 2013 to discuss possible adjustments to the price ceiling and recognized “the need to constantly put in place procedures and measures to address extreme price spikes or prolonged price volatility.”
ERC, meanwhile said the secondary cap, now a permanent mitigating measure, was aimed to avoid sharp increases in bid prices at the WESM, especially when power supply is tight.
