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Manila Bulletin devider Business devider ERC sets regulatory review on price cap for WESM, RE certificates

ERC sets regulatory review on price cap for WESM, RE certificates

Published Dec 15, 2023 06:07 am

At A Glance

  • The three rules prescription to be decided upon by the ERC - after warranted consultation processes with the relevant stakeholders and affected parties - are all anchored on the bigger goal of achieving energy security for the Philippines.

The Energy Regulatory Commission (ERC) is scheduling public consultations on the proposed regulatory review and enforcement of rules that will directly impact consumers’ pockets as well the overall business viability of the power industry.

The industry regulator apprised all relevant stakeholders that it will be undergoing fresh round of deliberation on rules that will potentially modify the secondary price cap (SPC) currently being enforced at the Wholesale Electricity Spot Market.

“The ERC remains steadfast in its commitment to promote energy security and protect the public from volatile prices in the spot market,” the Commission said.

It emphasized that the review process will be anchored on the rule-making petition lodged by the Philippine Independent Power Producers Association Inc. (PIPPA), an organization of the country’s power generators.

“The draft SPC Rules proposes changes to the methodology for determining the secondary price cap (SPC) in the WESM,” the regulatory body expounded.

Essentially, the secondary price cap sets a limit on spot prices “to manage excessive increases or high market prices and mitigate the impact of price volatility and excessive prices in the WESM.”

Additionally, the Commission will re-assess the reliability indices imposed to the industry players as decreed under the Rules for Reliability Performance and Equivalent Forced Outage Days per Year of Generating Units.

That particular plea for another set of rule-making was also filed by PIPPA, according to the ERC, because that is a facet inauspiciously affecting the operation of their electric generating facilities.

After consultation processes, the ERC indicated it will mandate amendments to the existing rules that have been prescribing the allowable outages across technologies for power generation plants in the country – and these are typically set in a number of days.

Further, the ERC declared that it will be instituting rules on the determination of price cap for the targeted trading of renewable energy certificates (RECs) that will also be channeled through the spot market.

It specified that the draft rules on RECs had been based on the inputs of the Department of Energy (DOE); and this will be a regulatory support to the creation of the RE Market (REM) – that in turn will serve as alternative revenue-generating proposition to the RE investors.

Related Tags

renewable energy Energy Regulatory Commission Wholesale Electricity Spot Market Price cap power plants
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