ERC urges WESM reforms to protect electricity consumers

Energy Regulatory Commission Chairperson Francis Saturnino C. Juan has called for tighter market monitoring and structural reforms as the Wholesale Electricity Spot Market enters its next 20 years amid growing market concentration and rapid technological change.

The reforms matter to the public because prices formed in WESM affect electricity costs ultimately charged to consumers, making strong oversight essential to prevent anti-competitive conduct, unjustified price increases and threats to reliable power supply.

The Philippine Electricity Market Corporation hosted Electricity Market Exchanges 2026 as a centerpiece of WESM’s 20th anniversary celebration.

Held on 19 August 2026 at Solaire Resort North, EMX 2026 carried the theme “Empowering Market Flexibility: Pathways to a Resilient and Inclusive Energy Future,” according to the ERC’s official event account.

Juan used his keynote address to discuss system loss pass-through costs, market concentration and the country’s changing energy mix.

He explained that system loss charges cover the cost of electricity lost while power is being delivered to consumers.

The cost reflects generation and electricity procurement expenses rather than additional earnings for distribution utilities, which collect the charge on a revenue-neutral pass-through basis subject to strict ERC caps.

Looking toward WESM’s next two decades, Juan said regulators must become more vigilant and the market’s structure must remain adaptable as new technologies transform the power system.

“In a market where there is high concentration of market power in the hands of a few participants, there is need for closer monitoring to ensure that those with market power will not abuse that market power or resort to anti-competitive behavior… We should be more vigilant in our monitoring efforts, so we ensure that there remains to be competition happening and that prices are not unduly inflated to the detriment of our electricity consumers.”

Juan said concentrated market power warrants closer scrutiny because a small number of participants could influence competition and prices to the disadvantage of electricity consumers.

The Philippine power sector now differs fundamentally from the market that existed 20 years ago, he said.

The rapid entry of variable renewable energy and energy storage systems requires grid and market rules capable of managing less predictable generation while maintaining a stable electricity supply.

Efficiently integrating these assets could help expand the use of cleaner energy without compromising grid reliability or imposing avoidable costs on consumers.

Juan also cited the need to explore long-term baseload options such as nuclear power as the country seeks to reduce its dependence on imported fuels and secure affordable, reliable electricity.

WESM is a centralized marketplace where electricity buyers and sellers trade power, with prices determined by demand and available supply.

Created under the Electric Power Industry Reform Act of 2001, WESM began commercial operations in Luzon in June 2006 and expanded to the Visayas in December 2010, according to PEMC.

PEMC transferred WESM’s market operations to the Independent Electricity Market Operator of the Philippines on 26 September 2018 but retained its role as the market’s governance arm.

PEMC said it would align its work with regulatory directions, strengthen market monitoring and support policies that place consumer protection and market sustainability at the center of WESM’s development.