MANILA, Philippines -The Energy Regulatory Commission (ERC) has begun its review of the secondary price cap at the spot electricity market, citing the need for “balancing act” to attract more investors while protecting consumers.
In a statement following a meeting with the Private Sector Advisory Council, the regulator admitted that based on initial analysis, the price cap “distorted” price signals coming from the Wholesale Electricity Spot Market (WESM), dampening investors’ interests in the Philippine power generation sector.
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“We need to ensure that the regulatory framework incentivizes investors to pour in more capital by building additional power plants to bolster the country’s supply requirements,” ERC chair Monalisa Dimalanta said.
“At the same time, we cannot discount the fact that the price cap is a preventive measure to protect the consumers from the immediate impact of high market prices,” she added.
The price cap is set at P6.245 per kilowatt-hour (kWh) when average prices breach the threshold of P9 per kWh over a three-day period. INQ