Filipino consumers may be greeted with bad news in the New Year as spot prices of electricity have been inching higher this month, December, due to continued forced outages of power plants.
As of December 21, the operator of the Wholesale Electricity Spot Market (WESM) has apprised media that settlement prices climbed by 22.2-percent or P1.15 per kilowatt hour (kWh) higher to P6.32 per kWh from last month’s average of P5.17 per kWh. This is expected to reflect in higher electricity rates in consumer bills in January 2022.
According to the Independent Electricity Market Operator of the Philippines (IEMOP), there was “thin supply margin brought about by forced and planned outages of major power plants,” and contributing factor to that had also been last week’s hit of typhoon Odette.
Given disruption of electricity supply flow due to calamity-induced damage in power infrastructure facilities, the WESM operator similarly indicated the market suspension was enforced by the Energy Regulatory Commission.
Based on that development in the power spot market, it was emphasized that ‘administered prices’ will be implemented - and that is seen likely hovering at P4.60 per kilowatt hour. If ever, such cost-impact will be reflected in the forthcoming billing cycle.
IEMOP similarly notified trading participants that the secondary price cap (SPC) was imposed for roughly three days starting at trading interval 10:50am on December 17 and was only lifted effective at the dispatch interval of 3:25pm on December 19.
The spot market operator qualified that the SPC imposition “is still subject to validation, to take into consideration the application of pricing corrections and/or market intervention.”
IEMOP had issued the notice to trading participants on December 21 as “supplement real-time advisories” that are channeled through the market management system’s (MMS) interface with market participants.
The secondary price cap in the WESM, which had been pegged at P6.245 per kWh, is often activated when there is sustained high prices in the trading settlements – primarily if the cumulative price threshold of P9.00 per kWh had been breached within the prescribed three-day rolling period.
As stipulated also in a resolution issued by the ERC this year, “during the period when the price cap is imposed, oil-based plants are entitled to recover additional compensation, subject to compliance with the prescribed requirements and procedure under the relevant rules and issuances.”
Meanwhile, IEMOP specified that “due to colder weather, demand decreased from 10,379 megawatts to 9,559MW” this December; logging a difference then of 820MW from last month’s supply level.
On the system peak demand for the month, this was recorded last December 15 at 12,096 megawatts; and this was correspondingly down by 4.768-percent or 579MW from the previous supply month.