ERC eyes new power rate price cap

Posted at 04/21/14 12:56 PM

MANILA, Philippines – The Energy Regulatory Commission (ERC) has proposed a resolution seeking to set a second layer of price control in the Wholesale Electricity Spot Market (WESM) to prevent excessive rate spikes.

ERC executive director Francis Juan said the regulator is proposing to lower the clearing price to P6.24 per kilowatt-hour (kWh) when average prices breach the threshold of P7.81 per kWh over a 72-hour period.

The primary price cap is at P32 per kWh, but Juan said this may not be enough to temper rate hikes in May and June, when prices are expected to increase.

“Kahit kasi mayroon tayong primary cap na P32, maaaring ang presyo sa merkado sa pangkalahatan on the average ay magiging mataas pa rin kung mas maraming beses na ‘yung P32 na ‘yan ang magiging clearing price o malapit doon,” Juan told dzMM on Monday.

“Kung mas marami ‘yung pagki-clear ng presyong nasa P32 o malapit diyan, ang pangkabuuang average na presyo sa WESM ay tataas din,” he added.

Juan said the proposal is still up for public consultation, with stakeholders given until Tuesday, April 22 to submit comments.

The proposal will then be discussed by the ERC, Department of Energy and Philippine Electricity Market Corporation by next week.

If all interested parties come to an agreement by then, the secondary price cap will be implemented before the May and June billing.

“Dito sa mga buwan na ito nakikita ng Commission na maaaring magtataasan ang presyo sa merkado,” said Juan.

Juan also said that despite the expiration of the temporary restraining order (TRO) on the Meralco rate hike on Tuesday, rates will not automatically increase.

He said Meralco will still have to wait for the recalculated rates from PEMC for the generation charge in December 2013.