THE Energy Regulatory Commission (ERC) on Friday warned of higher electricity prices due to fuel cost increases caused by the war on Iran.
Simulations reviewed with the Independent Electricity Market Operator of the Philippines (IEMOP) showed that higher global fuel prices would put pressure on Wholesale Electricity Spot Market rates, the regulator said.
Consumers will ultimately bear the burden of higher power costs, and the situation could also worsen if large generating units experience forced outages, the ERC added.
If supply becomes constrained, it said that more expensive generation companies could end up setting market prices.
The ERC, however, said that regulatory safeguards and market protection mechanisms remain operational, including the secondary price cap mechanism that automatically activates if average spot prices breaches a threshold.
As a result of the war on Iran, the regulator said that it had directed the IEMOP and the ERC Market Operations Service to continue closely monitoring market activities and immediately report any unusual or suspicious behavior.
“Our priority is to protect consumers from undue price volatility while ensuring a stable and reliable power supply,” ERC Chairman and CEO Francis Saturnino Juan said.
“Preparedness remains important given the Philippines’ exposure to global energy markets,” he added.