Group hails ERC suspension of WESM amid heatwave crisis

In a move lauded by consumer groups, the Energy Regulatory Commission (ERC) has temporarily suspended the Wholesale Electricity Spot Market (WESM) in Luzon and Visayas during red alert conditions, a response to the widespread power outages and extreme heat levels brought on by the current El Niño event.

The ERC’s decision, detailed in an April 30 order, aims to protect consumers from the spike in electricity costs typically seen during forced outages. These outages, often due to failures at fossil fuel power plants, have recently escalated power interruptions nationwide, prompting the issuance of yellow and red alerts throughout April.

Gerry Arances, convenor of the Power for People Coalition (P4P), expressed relief over the suspension, noting its significance amidst escalating municipal calamities related to the heatwave.

“Today, over 200 municipalities and cities are under a state of calamity due to El Niño, with high temperatures expected to persist,” Arances stated. “Filipino consumers are already suffering; avoiding even higher electricity prices from outages is a critical relief.”

During periods of red and yellow alerts, distribution utilities often purchase costlier spot market power to fill the gaps left by non-operational contracted power plants. This practice can lead to substantial price surges, with WESM data indicating average price increases of 11% in Luzon and 53% in Visayas during high heat indices.

Further complicating matters, P4P has called for ERC investigations into power companies allegedly profiteering from these circumstances, particularly noting that some plants, like FirstGen’s Sta. Rita Gas Power Plant and San Miguel’s MPPCL Coal Power Plant, continued to supply power at likely inflated prices during the April 15-21 outages.

Arances also criticized energy policies favoring coal and gas, which he claims exacerbate the current crisis. He stressed the importance of accountability for power companies that fail to deliver reliable service, urging the elimination of collusion risks and the maintenance of price caps.