THE Energy Regulatory Commission (ERC) has set the ceiling price for the facility reserve market at P25 per kilowatt-hour (kWh), subject to review every five years.
The agency adopted a reserve offer price floor of P0 per megawatt-hour (MWh) and a cap of P25,000 per MWh, in keeping with a document posted on its website.
The reserve market allows the system operator to purchase power reserves from the wholesale electricity spot market (WESM) — the trading floor of electricity — to satisfy the reserve requirements of the energy system.
These reserves are services needed to keep up balance in the facility system to make sure normal frequency and voltage levels in response to demand changes, variability of renewable energy and a possible loss of a big generating unit, in keeping with the Energy department.
“The interim offer price floor and cap shall be reviewed and recomputed one 12 months after its implementation, contingent on the gathering of sufficient data from the annual submission of generation firms,” the ERC said.
The commission said it could review the offer price floor and cap every five years, or earlier when needed. The complete industrial operations of the reserve market began in January.
The Energy department temporarily imposed a price cap of P32,000 per MWh, which is comparable to P32 per kWh, and a price floor of P0 per MWh. The ERC, nevertheless, deemed the offer ceiling “excessive.”
In March, the ERC suspended the operations of the billing and settlement of the reserve market after the numerous price increases in reserve costs for the month.
The commission ordered the settlement of 30% of the amounts in May to permit power generators to partially get better their costs.
The ERC then lifted the suspension in July to pave the way in which for the resumption of reserve trading for contracted and merchant plants.
But it surely ordered the Independent Electricity Market Operator of the Philippines to recalculate the amounts for the February and March billing periods.
Earlier this month, the ERC allowed the recovery of the remaining 70% or P3.05 billion for power generators that supplied the reserve market in the course of the period, which will likely be collected from consumers starting next 12 months. — Sheldeen Joy Talavera
