Manila Standard Today
By Alena Mae S. Flores | Aug. 23, 2014 at 12:01am
The Energy Regulatory Commission on Friday defended its decision to indefinitely extend the secondary price ceiling at the Wholesale Electricity Spot Market amid calls among power generators and the business sector to lift the cap.
The Management Association of the Philippines asked the ERC to lift the secondary price cap to address the impending power supply issue next year.
“We encourage the ERC to lift the secondary price cap in the WESM, as this deters the entry of new and existing peaking plants by effectively disallowing them from recovering fuel costs,” MAP said in a position paper.
ERC issued a directive on May 5 pegging a secondary price cap of P6.245 per kilowatt-hour for the May and June power supply months to mitigate the anticipated higher prices at spot market. The price cap was extended indefinitely.
ERC executive director Francis Saturnino Juan said the extension of the secondary cap was decided and would remain until a permanent mitigating measures was put in place.
“It [ERC] sees the continuing need for this measure to prevent market power abuse and other anti-competitive practices, which affects prices in WESM to the detriment on the consumers. It is convinced that even with the secondary cap, peaking plants will be able to recover their full allowable costs,” Juan said.
Sources said some 150 megawatts of additional capacity from peaking plants were expected to come in, once the secondary cap was lifted. source
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