Visayas Electricity Prices Soar Amid Heat, Plant Outages

Electricity consumers in the Visayas are grappling with sharp increases in their bills this April as Wholesale Electricity Spot Market (WESM) prices surged nearly 95.5%, triggered by scorching summer temperatures and reduced power supply.

The Independent Electricity Market Operator of the Philippines (IEMOP), which oversees the WESM, reported that the price per kilowatt hour rose to PHP 5.34 in March from PHP 2.73 in February.

The rise began in the first week of March, coinciding with the onset of extreme heat and a notable increase in power demand, according to IEMOP.

“The extreme heat during the first week of March led to a 5.9% increase in demand, reaching 13,670 MW nationwide,” the agency said in its report.

At the same time, total electricity supply dropped by 4.4% to 19,611 MW from 20,512 MW, compounding the supply-demand imbalance that pushed up spot prices.

IEMOP cited planned and forced outages at coal and natural gas facilities as key contributors to the reduced grid supply.

“Derations,” or the reduction in a power plant’s ability to run at full capacity, also played a role in the supply shortfall, the agency explained.

Derations occur when a generating unit can no longer operate at its original efficiency, much like a battery that weakens over time.

As WESM prices climbed, power distributors who rely on the spot market to meet demand were also forced to pay more, a cost eventually passed on to household and commercial consumers.

The ripple effect of elevated WESM prices has led to higher electricity rates across several distribution utilities in the Visayas region.

These utilities, unable to secure cheaper contracted supply due to the sudden demand surge, had to source more electricity from the volatile spot market.

With temperatures expected to remain high in the coming months, IEMOP warned that consumers may continue to experience elevated rates unless plant outages are resolved and supply stabilizes.

The WESM is a centralized venue where electricity is traded between generators and distributors based on real-time demand and supply levels.

Analysts note that the current volatility highlights the urgent need for enhanced grid reliability and diversified energy sources to cushion future price shocks during seasonal peaks.

For now, consumers are urged to practice energy efficiency and monitor advisories from their local power providers as the dry season continues to strain the power grid.