June spot power prices surge after continued Visayas grid instability

ELECTRICITY spot market prices rose in June after supply margins thinned due to persistent power plant outages in the Visayas, the Independent Electricity Market Operator of the Philippines (IEMOP) said.

The average electricity spot market price rose P1.77 or about 22.7% in June to P9.56 per kilowatt hour (kWh) as overall supply remained tight despite lower demand.

Isidro E. Cacho, Jr., IEMOP vice-president for Trading Operations, said overall system energy supply was 21,133 megawatts (MW) for the May 26 to June 25 period, from about 21,374 MW a month ago.

IEMOP said that demand for the period decreased to 15,454 MW from 15,755 MW a month earlier.

“Grid alerts are more commonly associated with the summer months, when electricity demand is typically higher. This year, however, continued generating-unit outages and tighter regional supply conditions extended beyond the summer period, particularly in the Visayas and Mindanao,”  Mr. Cacho said.

At the same time, new generating capacities entering the market are also expected to support the country’s electricity needs, he said. 

Several special pricing conditions were issued during the billing period, IEMOP said, noting that the price substitution methodology reached 17.71% in Luzon, 15.24% in Visayas, and 17.20% in Mindanao; while the secondary price cap was also triggered for the period.

The secondary price cap mechanism is designed to avoid excessive high market prices.

Meanwhile, in a separate briefing, Energy Regulatory Commission (ERC) Chairman and Chief Executive Officer Francis Saturnino C. Juan said the commission is set to decide on the petition of Manila Electric Co. (Meralco) for a refund of about P9 billion and a recovery of about P9 billion.

At the same time, the ERC said it is drafting new rules to help accelerate the adoption of renewable energy in off-grid areas and lower the universal charge for missionary electrification. 

“At the heart of these reforms is a simple objective: to deliver more affordable, reliable, and sustainable power to our off-grid communities while easing the burden on all electricity consumers who bear the UC-ME charge,” Mr. Juan said. — Ashley Erika O. Jose