By | Dec. 16, 2013 at 12:02am
Regulators plan to impose a lower price cap in the energy market to protect consumers from sudden spikes in electricity rates like the one observed this month.
Philippine Electricity Market Corp. president Melinda Ocampo told reporters the tripartite committee at the wholesale electricity spot market was studying lowering the current price cap of P62 per kilowatt-hour.
“The tripartite committee will look at amending the cap, lowering it,” Ocampo said.
PEMC is the company that operates WESM, which serves as the trading floor of electricity for power generators and distributors. Power purchased by distributor Manila Electric Co. from WESM jumped by P2.38 per kWh in November, amid the maintenance shutdown of the Malampaya gas platform and the outage of several power plants.
Ocampo said she received an order from Energy Secretary Carlos Jericho Petilla, a member of the tripartite committee, to study a lower WESM market cap.
The Energy Regulatory Commission earlier allowed power distributor Manila Power Co. to increase the power rate by P4.15 per kilowatt-hour, because of the higher cost of generating power, as a result of the maintenance shutdown of the Malampaya natural gas platform.
The rate adjustment will divided into three tranches, starting with P2.41 per kWh in December, P1.21 per kWh in February and P0.54 in March.
The government initiated an investigation on the reasons for the big increase in power rates. Petilla said the Energy Department would come out with the results of the investigation on the allegations of collusion on the high prices before the end of the month.
“December 30 is date of fact finding results. No penalty because we really have no conclusion yet at this point,” he said.
The Malampaya natural gas plants, which shifted to costlier fuel due to the Malampaya shutdown, raised their generation rates by P1 per kWh, while Meralco’s other suppliers contributed an increase of 0.02 per kWh.
Meralco bought around 13 percent of its power supply from WESM in November.
Meralco records showed the Luzon load weighted average price at WESM rose to a record-high P15.51 per kWh in November, up from P6.16 per kWh in October.
Ocampo said the cap set the price limit at the WESM, even if prices shot up due to scarcity of power.
The tripartite committee was created in 2006 to coordinate efforts for monitoring price volatilities and setting mitigation measures during the initial year of the WESM implementation. It is composed of PEMC, Energy Department and the Energy Regulatory Commission.
Ocampo said Meralco did not secure 100 percent of its power requirements from WESM because it had existing contracts with bilateral suppliers.
She said Meralco and other power distributors continued to buy power from the WESM because there were times that prices at the spot market were lower than their bilateral countracts.
“There is space for them to take advantage of lower price,” she said.
“When it comes to prices at the WESM, it’s market-driven so if there is sufficient power, they can even get lower prices than their bilateral contracts. If there are insufficient supply, scarcity, that’s when prices go up,” Ocampo said. source
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