The Energy Regulatory Commission (ERC) has raised the secondary price cap (SPC) in the Wholesale Electricity Spot Market (WESM) to P7.423 per kilowatt-hour (kWh) from the previous P6.245/kWh.
The new SPC will be imposed as a pre-emptive mitigating measure when the cumulative price threshold (CPT) of P12.413 per kWh is breached over a 72-hour rolling period. Previously, the SPC of P6.245/kWh was triggered upon breach of a P9/kWh rolling average price over a three-day period.
The regulator issued Resolution No. 26, series of 2025, which amends Resolution No. 07, series of 2021.
It said the measure is intended to limit the impact of extreme price volatilities and excessive price levels in the WESM while ensuring fair compensation for power generators.
The ERC noted that the new CPT of P12.413 per kWh already factors in the average marginal cost of more expensive plants, such as those that are liquefied natural gas and oil-based, which are expected to clear during peak demand periods.
The CPT is defined as the predetermined maximum price for a rolling average over a set time frame that activates the SPC.
The resolution maintains the regional or island SPC mechanism established under a prior resolution, subject to the updated parameters.
The regional/island SPC will only be applied when the grid interconnection is on outage, using the same SPC value, CPT, and rolling average period applicable to the system-wide SPC.
It will be imposed if the CPT is breached on the system-wide rolling average on the 72nd hour and a high voltage direct current link or island interconnection subsequently goes on outage.
The ERC’s decision followed petitions filed by the Philippine Independent Power Producers Association Inc. (PIPPA) that sought to rescind or suspend issuances related to the SPC, adopt proposed rules on the SPC and recognize variable operations and maintenance, fixed operations and maintenance cost and fuel components as recoverable additional compensation costs.
PIPPA has called for the removal of the SPC since 2014, saying it would provide proper price signals for greater investments in the power generation sector.
