ERC orders resumption of market-driven power rates through WESM

MANILA, Philippines – The Energy Regulatory Commission (ERC) on Friday, May 1, ordered the resumption of the Wholesale Electricity Spot Market (WESM) operations.

WESM is the country’s electricity trading market, where power generators can sell power to distribution utilities, electric cooperatives, and suppliers.

Because of this, WESM prices change depending on price offers, as well as supply and demand conditions. These market movements are also reflected in consumers’ monthly electricity bills, often under generation charges.

The ERC suspended WESM operations on March 26 due to rapidly increasing fuel prices and supply chain shocks brought by the Middle East situation.

The government then implemented a modified pricing mechanism to conserve fuel and mitigate the effects of the supply shocks on power rates.

According to ERC Chairman Saturnino Juan, the resumption of WESM operations will allow electricity prices to accurately mirror the current market conditions while maintaining safeguards for consumers.

“We observed that although the temporary pricing mechanism was effective in addressing the emergency, prolonging its use could lead to unintended charges in market settlements,” he said. – Rappler.com