The Energy Regulatory Commission temporarily suspended the operation of the Wholesale Electricity Spot Market (WESM) in Luzon and Visayas under certain conditions to mitigate the anticipated increase in prices in the spot market, President Marcos said on Wednesday.
This developed as the National Grid Corp. of the Philippines (NGCP) placed the Luzon grid on yellow alert for the third consecutive day this week due to lack of available reserves.
“Because of the intense heat, electricity consumption is increasing, which adds to the rise in prices,” the President said.
“Just yesterday, the Energy Regulatory Commission took action to temporarily suspend the operation of the Wholesale Electricity Spot Market, or WESM, when the System Operator, NGCP, declares a Red Alert. This is aimed at curbing the rise in electricity prices amid the calamity caused by El Niño,” Mr. Marcos added.
WESM prices have gone up amid the red and yellow alert notices due to the significant increase in demand amid high temperatures.
NGCP placed the Luzon grid status on yellow alert from 8 p.m to 10 p.m. even as available capacity reached 15,026 megawatts (MW) compared to peak demand of 12,899MW.
NGCP said four plants have been on forced outage since 2023, three between February and March 2024, and 13 since April 2024.
Two others are running on derated capacities for a total of 1409.3MW unavailable to the grid.
A yellow alert is issued when the operating margin is insufficient to meet the transmission grid’s contingency requirement.
“The Commission is working doubly hard to alleviate the impact of El Niño on our power system, and we are finding ways to mitigate the impact of the extremely high demand resulting from the high heat index as these ultimately affect our consumers,” ERC chairperson and chief executive Monalisa Dimalanta said.
The ERC said that during such period of market suspension, the administered price shall apply.
Data from the WESM for the periods when the high heat index was recorded and alert notices were issued showed that the average prices per day increased by an average of 11 percent in Luzon and 53 percent in Visayas, which translates to a significant impact in the consumers’ electricity bill.
Under Section 30 of Republic Act No. 9136, otherwise known as “Electric Power Industry Reform Act of 2001” (EPIRA), the ERC can suspend the operation of the WESM or declare a temporary WESM failure in cases of national and international security emergencies or natural calamities.
The government’s Task Force El Niño reported that there are 131 cities and municipalities that have already declared a state of calamity due to the extreme heat conditions being experienced nationwide.
On this basis, the ERC has determined the occurrence of conditions equal to or comparable to a natural calamity.
“We are also reiterating our call for distribution utilities sourcing from the WESM to be proactive in exploring ways to lessen their exposure,” Dimalanta said.
The Commission said the suspension of WESM shall be lifted only if the regional available capacity, less actual regional demand, reaches above zero for 24 consecutive hours.