ERC suspends power spot market, modifies pricing mechanism

The Energy Regulatory Commission (ERC) said it has ordered the suspension of the operations of the Wholesale Electricity Spot Market (WESM) nationwide starting Thursday, March 26, 2026.

This is to address energy supply risks and volatile electricity prices due to the Middle East tensions.

“The power system will operate under Special Operating Guidelines (SOG) issued by the DOE, which prioritize optimal dispatch of available renewable energy resources, conserve critical fuel inventories amid global fuel supply disruptions, and provide an operational framework for system dispatch,” the ERC said in a statement.

“All market participants, including the Independent Electricity Market Operator of the Philippines (IEMOP) and the National Grid Corporation of the Philippines – System Operator (NGCP-SO), are directed to comply with these interim measures,” it added.

Under the order, WESM operations have been suspended starting at 12:05 a.m. on Thursday.

The move comes after the issuance of Executive Order No. 110 that declared a state of national energy emergency, as well as the recommendation from the Department of Energy (DOE) to suspend the WESM.

Also, the ERC will implement a modified administered pricing mechanism while the suspension is in effect. Its framework is still under consultation with stakeholders and is targeted for finalization by April 1.

The modified AP framework introduces a technology-specific pricing approach to better reflect prevailing fuel costs and ensure the continued operation of power generators, the Commission said.

“Under the proposed scheme, coal plants may be paid at a fixed rate, natural gas plants based on contracted prices, and renewable energy sources such as hydro and geothermal, under administered pricing with preferential dispatch,” the ERC said.

“Oil-based plants, meanwhile, will be compensated based on administered prices when dispatched or contracted,” it added.

The ERC said the shift in pricing is necessary as previous benchmarks based on January and February market prices no longer reflect current conditions marked by supply constraints and rising global fuel costs.

ERC chairperson and CEO Francis Saturnino Juan said the measures aim to protect consumers while maintaining a stable power supply.

“In times of global energy disruption, our priority is clear: to protect Filipino consumers while ensuring that our power supply remains stable and reliable,” he said.

“The temporary suspension of the WESM and the implementation of a modified administered pricing mechanism are necessary measures to cushion the impact of volatile fuel prices and safeguard the integrity of our power system,” he added.

The suspension of WESM will remain in place until the ERC, in coordination with the DOE, determines that conditions are suitable for the resumption of normal market operations, the Commission said.

The ERC noted that the measures are temporary and meant to cushion the impact of the ongoing global energy disruptions while safeguarding the country’s power system. —Joviland Rita/AOL, GMA Integrated News