MANILA, Philippines — The Energy Regulatory Commission (ERC) partially lifted trading restrictions at the Wholesale Electricity Spot Market (WESM) to allow generation companies to recover partial costs in providing power reserves.
In ERC Case No. 2023-002 RC, the ERC said the directive to partially resume billing and settlement at WESM would allow power generators to recoup P1.7 billion or an initial 30 percent of P5.7 billion worth of trading transactions at the reserve market for the March billing period.
Based on the May 9 order of the ERC, the amount is subject to adjustments pending submission by grid operator National Grid Corp. of the Philippines of the list of non-compliant generators.
Sought for additional information, ERC Chair Monalisa Dimalanta said the agency was targeting to lift the suspension order within the month.
Dimalanta said the ERC was waiting for the complete submission of the required documents to finish its evaluation.
The ERC said it had arrived at this decision “to ensure continuous operations of power generators” that deliver power reserves or ancillary services in the power system.
Partial recovery of costs
Ancillary services are necessary to ensure the uninterrupted transmission of electricity from power plants to electricity consumers.
READ: Heavy power users told to ready gensets amid tight supply
“In this instance, partial recovery of costs for services rendered will allow these generators to recover a portion of their operating costs to enable them to continue supplying in the energy or reserve market for the benefit of the public,” the regulator said.
“The ERC always needs to strike a balance in performing its mandate to ensure the reliability and security of the power system through the continuous operations of the generators and protecting the consuming public,” it added.
To recall, the regulatory agency suspended in March the billing and settlement at the reserve market to temper spikes in electricity rates.
It suspended the implementation of Section 8 on Billing and Settlement of the Price Determination Methodology for the March billing period of WESM.
Citing reports from the Independent Electricity Market Operator of the Philippines (IEMOP), which operates the WESM, the ERC said there were “significant price increases” in reserve costs in March this year compared with a month ago.
The ERC had directed both the IEMOP and Philippine Electricity Market Corp. to submit the results of the software audit, raising “concerns on the reasonableness of such cost increases” including the mechanics of co-optimization in light of existing policies and regulations.