ERC raises secondary price cap in power spot market 

The Energy Regulatory Commission (ERC) has approved revised rules that raise the secondary price cap (SPC) in the Wholesale Electricity Spot Market (WESM).

Under the new framework, the SPC was increased by 19 percent to P7.423 per kilowatt-hour (kWh) from the previous P6.245 per kWh.

The cap will now be activated only when the three-day rolling average of spot market prices breaches P12.413 per kWh. This is higher than the earlier trigger level of P9 per kWh.

ERC chair and CEO Francis Saturnino Juan said the recalibration was necessary to keep the price cap responsive to prevailing market conditions.

This is needed particularly during peak demand periods when higher-cost plants are dispatched to meet supply needs.

“The recalibration was necessary to ensure the price cap remains responsive to prevailing market dynamics, particularly during peak demand periods when higher-cost plants are dispatched to meet electricity demand,” he said.

He added that the changes aim to balance market stability, fair pricing and reliable power supply for consumers.

The SPC functions as a preemptive safeguard in the spot market, designed to prevent sustained price surges during periods of tight supply.

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When triggered, the SPC temporarily limits clearing prices in WESM. This helps stabilize the market while allowing certain power plants to recover verified costs incurred during extreme supply-demand conditions.

WESM serves as the country’s real-time electricity trading platform. Through this, generators sell power and buyers, such as distribution utilities, purchase electricity at prices that change depending on supply conditions and demand levels.

The revised rules were approved through Resolution No. 26, adopted during the ERC’s meeting last Nov. 26.