ERC suspends WESM operation on red alerts

MANILA, Philippines —  The Energy Regulatory Commission (ERC) has suspended the Wholesale Electricity Spot Market (WESM) due to a series of red alerts in the Luzon and Visayas grids since April 16.

The ERC cited data from WESM indicating that average prices per day amid the high heat index went up by 11 and 53 percent in Luzon and the Visayas, respectively.

Due to this, the ERC will implement an “administered price” during the period of a market operation.

However, a dispatch interval between the administered price and a secondary price cap will be “subject to price mitigation.”

The lower amount between the two prices will be applied in the settlement of transactions.

The suspension of WESM will be lifted once the regional available capacity, less the actual regional demand, reaches above zero for 24 consecutive hours.

The suspension is pursuant to Electric Power Industry Reform Act of 2001, which allows the ERC to suspend market operations in the wake of a national calamity.

The ERC cited the increased power demand due to the El Niño phenomenon as an emergency.

“The Commission is working hard to alleviate the impact of El Niño in our power system. We are looking for ways to mitigate the impact of the extremely high demand resulting from the high heat index as these affect our consumers,” ERC chairperson and chief executive officer Monalisa Dimalanta said.

Dimalanta urged power distribution utilities to be “proactive in exploring ways” to lessen its exposure to the spot market.

“The impact of high prices can also be alleviated by existing programs, such as the anti-bill shock lending program of the Land Bank of the Philippines, to allow consumers to pay through installment the incremental increases in their electricity bill,” Dimalanta said.

The Independent Electricity Market Operator of the Philippines said it has yet to coordinate with the ERC regarding the suspension of the spot market.

The National Grid Corp. of the Philippines (NGCP) yesterday announced that the Luzon grid is on yellow alert as the available capacity is only at 15,026 megawatts amid peak demand of 12,899 MW.

The NGCP issues red alert when the operating margin is insufficient to meet the transmission grid’s contingency requirement.

A yellow alert is raised when power supply is not sufficient to meet consumer demand and the transmission grid’s regulating requirement.

The Luzon and Visayas grids have been placed on red alert for around 20 hours as of April 25. The duration of the alert was significantly longer than in previous years.

Meanwhile, the Philippine Energy Efficiency Alliance (PE2) called for a strategic shift in flattening the 3,340-MW increase in demand through peak-shaving or load-shifting toward off-peak hours.

The PE2 said that permanent peak shaving is possible through “aggressive replacement of energy-intensive systems” in the commercial, industrial, transport and government sectors with more efficient technologies.