ERC raises WESM secondary price

The Energy Regulatory Commission (ERC) announced Wednesday it has increased the secondary price cap (SPC), a mechanism imposed to curb sustained high prices, in the Wholesale Electricity Spot Market (WESM).

In a statement, the ERC said that under its revised rules, the SPC was raised by 19% to P7.423 per megawatt-hour (MWh) from P6.245 per MWh. 

The cap will be applied when the 72-hour average electricity price exceeds P12.413 per MWh, up from the earlier trigger of P9.00 per MWh.

The SPC is defined as a preemptive market safeguard imposed by the ERC when there is sustained high prices, breaching the set cumulative thresholds. 

The power industry regulator said the move was aimed at curbing sustained electricity price spikes while maintaining investment signals for power generators.

The adjustment ensures stable electricity prices and reliable power supply for consumers while allowing generators to operate during peak demand, preventing extreme price spikes and keeping the electricity grid stable.

The ERC said the amendments were approved under Resolution No. 26, series of 2025. It was adopted during the ERC's meeting on November 26, 2025, which amended Resolution No. 07, series of 2021, governing the preemptive price mitigation mechanism.

Moreover, under the revised framework, the regulator said only oil-based and liquefied natural gas (LNG) power plants may recover additional compensation during periods when the SPC is in effect, and only if their verified fuel and variable operations and maintenance costs exceed the cap. Other generation technologies were excluded after the ERC found their marginal costs to be significantly lower.

Further, the ERC said the new rules retained the regional or island SPC mechanism established under a prior resolution, subject to the updated parameters.

The regional or island SPC will only be applied when the grid interconnection is on outage, and will use the same SPC value, cumulative threshold (CPT), and rolling average period applicable to the system-wide SPC, according to the ERC.

The ERC said the cap will be imposed if the CPT is breached on the system-wide rolling average on the 72nd hour, and a high-voltage direct current link or island interconnection subsequently goes on outage.

"The recalibration was necessary to ensure the price cap remains responsive to prevailing market dynamics, particularly during peak demand periods when higher-cost plants are dispatched to meet electricity demand," said ERC Chair and CEO Francis Saturnino Juan. — VDV, GMA Integrated News