Article by:
Joann Villanueva
MANILA – The Energy Regulatory Commission (ERC) on Thursday announced the temporary suspension of operations of the Wholesale Electricity Spot Market in all three grids in the country to help address the energy supply risk and price volatility due to the ongoing conflict in the Middle East.
This is in line with Malacañang’s issuance of Executive Order (EO) 110 on Tuesday, declaring a state of national energy emergency on account of the global oil supply disruption, which has resulted in a surge in global oil prices.
ERC, in a statement, said it received a letter from the Department of Energy (DOE) on Wednesday recommending the suspension of WESM operations in Luzon, Visayas, and Mindanao, effective Thursday.
“Accordingly, the ERC determined that immediate regulatory action is necessary to ensure the adequacy, stability, and reliability of the country’s power supply,” the statement reads.
ERC said the suspension order will start “at interval 0005H” or the fifth dispatch or data interval for Thursday’s operations.
“During this period, the power system will operate under Special Operating Guidelines (SOG) issued by the DOE, which prioritize optimal dispatch of available renewable energy resources, conserve critical fuel inventories amid global fuel supply disruptions, and provide an operational framework for system dispatch,” it said.
The order directs all market participants such as the Independent Electricity Market Operator of the Philippines (IEMOP) and the National Grid Corporation of the Philippines – System Operator (NGCP-SO), to comply.
ERC explained that during a market suspension, the regulator “will implement a Modified Administered Pricing (AP) Mechanism”, which “is currently under consultation with stakeholders and is targeted for finalization by 01 April 2026.”
It said that “the modified AP framework introduces a technology-specific pricing approach to better reflect prevailing fuel costs and ensure the continued operation of power generators.”
The proposal suggests that “coal plants may be paid at a fixed rate, natural gas plants based on contracted prices, and renewable energy sources such as hydro and geothermal, under administered pricing with preferential dispatch.”
For oil-based plants, it is suggested that they will paid “based on administered prices when dispatched or contracted.”
ERC said “adoption of a modified pricing mechanism is necessary because prevailing historical market prices (i.e., January and February), which would have been the bases of the administered prices under the prevailing rules, would not reflect current conditions marked by geopolitical tensions and fuel supply constraints.”
“The adjusted approach seeks to strike a balance between protecting consumers from excessive price spikes and ensuring that generators remain financially viable to sustain a reliable electricity supply,” it said.
“In times of global energy disruption, our priority is clear: to protect Filipino consumers while ensuring that our power supply remains stable and reliable. The temporary suspension of the WESM and the implementation of a modified administered pricing mechanism are necessary measures to cushion the impact of volatile fuel prices and safeguard the integrity of our power system,” ERC Chairperson and Chief Executive Officer Francis Saturnino Juan said. (PNA)
Log in with Google