The Energy Regulatory Commission said Wednesday it is amending the pre-emptive mitigating measure in the Wholesale Electricity Spot Market, the trading floor of electricity, to increase consumer safety nets and prevent price shocks.
The ERC adopted in 2017 the pre-emptive mitigating measure in the WESM considering the highly volatile nature of the spot market and the possibility of market power abuse in order to ensure consumer protection.
“The commission is cognizant of the country’s need for additional capacity which will come from new investments. Nonetheless, we also need to implement mitigating measures such as the secondary price cap in consideration of the paying capacity of the majority of the consuming public in pursuance of our mandate to exert efforts to minimize price shocks for the protection of consumers”, ERC chairperson Agnes Devanadera said in a statement.
The SPC allows the market operator to cap the prices in the market at P6.245 per kilowatt-hour as a protection for the consumers from possible price spikes.