PEMC data confirms WESM power-rate increase in August

by Lenie Lectura - September 19, 2016

http://www.businessmirror.com.ph/pemc-data-confirms-wesm-power-rate-increase-in-august/

August power rates at the Wholesale Electricity Spot Market (WESM) shot up following seven instances of yellow alert and three instances of red alert in the supply month, data from the Philippine Electricity Market Corp.  (PEMC) showed.

PEMC, operator of WESM, said the so-called effective settlement spot price, or ESSP, for August stood at P4.17 per kilowatt hour (kWh) as against July’s P3.30 per kWh. For the July supply month, there was just one instance of yellow alert.

ESSP pertains to the average price paid by customers for energy purchased from the spot market. The impact on consumers would depend on the distribution utility’s exposure.

“It’s P4.17 per kWh.  Relatively, it is still lower compared to bilateral contracts,” said Philip Adviento, PEMC’s training and communications manager.

The ESSP for August is lower, compared to the same period a year ago, which stood at P4.96 per kWh. Last year’s ESSP for July was recorded at P5.59 per KWh.

It can be recalled that during period July 26 to August 5, there were a total of 20 power plants that failed to deliver optimum power on those days because these were either on maintenance shutdown or forced outage. Of the 20 plants, 12 were placed on maintenance shutdown, while eight went on forced outage.
The operators and owners of these plants are being probed by the Energy Regulatory Commission (ERC) on suspicion that they were engaged in anticompetitive behavior.

The investigation was prompted by the recent outages that resulted in rotational brownouts in Metro Manila and nearby provinces.

These 20 plants were unable to deliver more than 4,000 megawatts.

The ERC will pursue the probe, even if power rates of the Manila Electric Co. (Meralco) went down during the August supply month, which was reflected in the September electricity bills of consumers.

Meralco had said overall charges from the WESM decreased by P0.32 per kWh.

PEMC had earlier said preliminary data revealed that there were surges in market prices on few intervals, but prices remain low in the weekend of July 30 and 31, 2016, due to decreased demand and lower temperature.

Taking into account the several yellow- and red-alert notices issued by the National Grid Corp. of the Philippines, the secondary price-cap mechanism was not imposed as breach of cumulative price threshold was not triggered as provided in ERC Resolution 20, series of 2014.

“WESM ushers in transparency in a liberalized regime where spikes in prices provide signals on tightness of supply condition due to forced and planned outages.

The secondary price cap and other measures, such as lowering of offer price cap and setting of offer price floor, were instituted by the Department of Energy, Energy Regulatory Commission and PEMC to address sustained high prices and volatilities inherent in a competitive electricity market,”  PEMC President Melinda L. Ocampo said.

“Rest assured, PEMC remains steadfast in maintaining transparency in market processes, as it continues to reflect market prices that signal the supply-and-demand relationship,” she added.

A price cap of P6.245/kWh is imposed should the cumulative price threshold of P9/kWh be breached over a 168-hour rolling average.