Power producers say cooperating with government to ensure supply of electricity
MANILA, Philippines — The Philippine Independent Power Producers Association (PIPPA) said Monday that it is coordinating with energy agencies to ensure power supply as the country experiences another round of fuel price increases this week.
"In response to questions relating to fuel increase and its effect on electricity bills, the member generators of the PIPPA are working with the Department of Energy and the Energy Regulatory Commission to ensure that our plants will be available ensuring sufficiency of supply," the group said to reporters over email on Monday.
"We trust that the DOE is also trying to identify sources of revenue for the government to mitigate electricity and fuel prices," it added.
PIPPA says it represents the industry voice of the power generation sector, with its member-independent power producers providing 79.2% of power to the nationwide grids.
The group issued its statement just as local oil firms announced another round of weekly pump price increases- the largest to date since the start of the year.
Gasoline rose by P3.60 per liter; diesel went up by P5.85 per liter; and kerosene climbed by P4.10 per liter this week.
The price increases were partly caused by supply disruptions driven by the geopolitical war between Russia and Ukraine.
'Remove the secondary price cap'
On Monday, PIPPA reiterated calls to remove or adjust the secondary price cap (SPC), a mechanism which puts a ceiling on traded power when there are high prices in the wholesale electricity spot market (WESM).
"The SPC only distorts the true cost and is not reflective of the real situation of the energy sector. As early as 2014, PIPPA has been advocating the removal of the SPC to provide proper price signal for additional investments in the generation sector," the group said.
More investments due to the absence of the price cap will lead to sufficiency in supply and competitive prices, according to PIPPA.
The WESM is a central venue for buyers and sellers to trade electricity as a commodity.
To address any supply gaps, power distributors often buy additional electricity from the WESM at higher costs compared to pre-agreed supply deals. The extra costs are passed on to consumers.
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