ERC Partially Lifts Suspension on WESM Reserve Market

ERC lifts WESM Reserve Market suspension, aiding generator cost recovery for stable power amid rising demand and renewable goals.

The Energy Regulatory Commission (ERC) has taken a significant step to stabilize the electricity market by partially lifting the suspension on payments within the Wholesale Electricity Spot Market’s (WESM) Reserve Market. This decision enables power generators to recoup some of the costs incurred during trading in March 2024.

Issued on May 9, 2024, under ERC Case No. 2023-002 RC, this move underscores the ERC’s commitment to balancing the needs of power generators and consumers. The order, titled “In the Matter of the Application for the Issuance of Rules on the Price Determination Methodology for the Implementation of the Co-Optimized Energy and Reserve Market in the WESM,” emphasizes this focus.

The decision follows a suspension order in March 2024, which disrupted the financial flow for power generators. Recognizing the importance of maintaining operational reserve generators for a stable energy supply, the ERC deemed partial cost recovery necessary. This measure safeguards generator interests while ensuring continued electricity supply for various sectors.

Based on meticulous analysis, including simulations to determine recoverable amounts, an estimated total of PhP1.7 billion is earmarked for partial payout to Reserve Market generators. However, this figure may be subject to change pending the submission of a list of non-compliant generators by the National Grid Corporation of the Philippines (NGCP), an intervenor in the case.

The ERC’s decision is particularly significant given the Department of Energy’s (DOE) forecast of a summer electricity demand surge due to air conditioner use. It supports a stable power supply despite ongoing WESM challenges. The Philippines, however, continues to see a rise in renewable energy investments, aligning with the government’s goal of a cleaner energy mix.

This action highlights the ERC’s multifaceted role. They manage complex market dynamics, regulations, and ultimately, ensure a reliable and affordable power supply for Filipinos. The ERC’s measured approach fosters an environment where both the industry and consumers can thrive.

Source: ERC Orders Partial Lifting Of Suspension On Reserve Market