P45-P50/kwh WESM price cap proposed

Manila Bulletin
by Myrna Velasco March 9, 2014 

The new price offer cap being proposed for the Wholesale Electricity Spot Market (WESM) had been set at the range of P45 to P50 per kilowatt hour (kwh), according to Energy Secretary Carlos Jericho Petilla. The revised cap will succeed the unilaterally-trimmed down WESM cap of P32 kwh enforced in January following controversies ignited by the spikes in spot market prices in November and December. 
The price offer ceiling prior to reduction was at P62 per kwh. The tripartite committee led by the Energy Regulatory Commission (ERC) indicated that the P32 cap will only be an “interim measure” and was expected to stay just for 90 days from its effectivity or until such time that a new cap will be approved subject to consultation with affected stakeholders. 
“The proposed cap…it’s around that range of P45 to P50…but we will only do so after we resolve that there’s enough protection so that the cap will not be abused,” Petilla said. 
He added that public consultations will be scheduled so parties-in-interest can air their respective issues and concerns on the bid cap revision. 
Industry players trading in the WESM, however, are pining for explanation from market operator Philippine Electricity Market Corporation (PEMC) and the regulators as to what are the basis and explanations behind the changing price caps. 
Aside from scaled down price cap, the uproar set off by the rate hikes of the Manila Electric Company (Meralco) during the Malampaya shutdown precipitated calls for various improvements in the WESM’s operations. 
Petilla himself noted the need to harmonize the operations of market operator (MO) PEMC with the capacity dispatch call of system operator (SO) National Grid Corporation of the Philippines. 
From the viewpoint of Philippine Independent Power Producers Association (PIPPA) president Luis Miguel Aboitiz, there might be a need “to understand why there was a different view between the SO and MO.” 
The result of an ongoing study, he said, “can be used to develop a better coordination protocol between the two,” noting further that a solution to this may require some changes in the WESM Rules. 
Other stakeholders also proposed possible shift to a net pool from the current gross pool design of the spot market, but it has been sounded off that such platform could be “a bit more complicated for PEMC to manage.” source