Luzon spot power rates surged 51%
Households and businesses in Luzon may have to shell out more to settle their power bills this month, as the prices of electricity traded at the spot market spiked by 51.2 percent to P7.83 per kilowatt-hour (kWh) in October.
Data from the Independent Electricity Market Operator of the Philippines (IEMOP) showed on Wednesday that supply in Luzon had dipped by 0.9 percent to 14,972 megawatts (MW) last month. Demand, meanwhile, rose by 6.9 percent to 10,580 MW.
“In Luzon, tighter supply margins due to rising demand and reduced generation availability, coupled with planned and forced outages, led to higher prices,” Rica Cagnayo, trading operations for market simulation and analysis staff at IEMOP, said at a media briefing.
IEMOP is the operator of the Wholesale Electricity Spot Market (WESM), an avenue where power is traded between producers and distributors to boost their supply.
This led to the systemwide power rates jumping to P8.79 per kWh from the previous month’s P7.43 per kWh despite the Visayas and Mindanao logging lower spot power rates during the period.
Both grids saw improvements in supply, increasing by more than 8 percent during the period. Electricity demand in the Visayas and Mindanao dropped to 2,087 MW and 2,126 MW, respectively.
Visayas rates fell 9.9 percent to P11.19 per kWh, while Mindanao prices also decreased by 12.3 percent to P11.06 per kWh.
“The implementation of the regional price cap was set forth by our regulator to really mitigate any significant price spikes or volatility,” said Isidro Cacho, Jr., IEMOP head of trading operations.
“Actually, the market was… more stable and stabilized in terms of the prices because of those mitigating measures. Aside from the secondary price gap, we also had a generally improved supply,” Cacho added.
In September, power regulators activated a secondary price cap to be applied regionally, an attempt to curb electricity spot surges in the Visayas and Mindanao to below P9 per kWh from almost P20 per kWh.
The new measure now relies on the rolling average price of each grid instead of the systemwide average.
