THE Energy Regulatory Commission (ERC) has ordered the temporary suspension of spot power market trading as part of government measures to address supply risks and price volatility arising from the war in the Middle East.
The directive to halt Wholesale Electricity Spot Market (WESM) operations followed President Ferdinand Marcos Jr. having declared a national energy emergency.
The ERC said the move was also in line with a Department of Energy (DOE) recommendation urging the suspension of WESM operations nationwide.
The halt began on Tuesday and the ERC said the power system would be operating under special DOE operating guidelines that aim to optimize the dispatch of available renewable energy resources, conserve critical fuel inventories and ensure system stability.
All market participants, including the Independent Electricity Market Operator of the Philippines and National Grid Corp. of the Philippines were directed to comply.
During the suspension, the ERC will implement a modified administered pricing mechanism, which is currently under consultation and targeted for finalization by April 1.
The updated pricing scheme will adopt a technology-specific approach to better reflect prevailing fuel costs and maintain the viability of power generators, it said.
Under the proposed framework, coal-fired plants may receive fixed rates while natural gas facilities will be compensated based on contracted prices.
Renewable energy sources such as hydro and geothermal will be prioritized for dispatch and paid under administered pricing while oil-based plants will be compensated when dispatched or contracted.
The ERC said the shift away from historical price benchmarks was necessary as these no longer reflected current market conditions marked by geopolitical tensions and fuel constraints.
“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,” ERC Chairman and CEO Francis Saturnino Juan said.
He added that the government’s priority was to protect consumers from price spikes while ensuring a stable and reliable electricity supply.
The suspension will remain in place until the ERC, in coordination with the DOE, determines that conditions are suitable for the resumption of normal market operations.