Power producers welcome higher spot market secondary price cap

Upgrade to High-Speed Internet for only ₱1499/month!

Enjoy up to 100 Mbps fiber broadband, perfect for browsing, streaming, and gaming.

Visit Suniway.ph to learn

December 18, 2025 | 12:00am

MANILA, Philippines — A group of independent power producers has welcomed the 19-percent hike in the Wholesale Electricity Spot Market (WESM)’s secondary price cap (SPC), noting that the move could send a clearer signal to investors.

“It will act as a signal to investors that the regulatory agency is responsive, so the increase is a good indicator,” Anne Montelibano, president and executive director of the Philippine Independent Power Producers Association, said.

 This comes after the Energy Regulatory Commission (ERC) approved revised rules raising the SPC to P7.423 per kilowatt-hour from P6.245 per kWh.

SPC refers to the preemptive mitigating measure imposed in the WESM to prevent sustained high prices while allowing generation companies to continue operating during peak demand.

WESM serves as a centralized platform for electricity trading where distribution utilities and electric cooperatives can source their energy requirements.

 “Although it’s lower than what we initially proposed in our petition, we are nonetheless thankful that the ERC acknowledged the need to review the SPC and the threshold to conform to the changing times,” Montelibano said.

 With this move, however, the cap will only be enforced when the average electricity price for a 72-hour period exceeds P12.41 per kWh, up from the previous trigger level of P9 per kWh. 

Under the amended rules, oil-based and liquefied natural gas plants may recover additional fees during periods when the SPC is in effect, provided their verified fuel and variable operations and maintenance costs exceed the cap.

 Other power generation technologies, meanwhile, were excluded after the regulator determined that their marginal costs are significantly lower.

“The recalibration was necessary to ensure the price cap remains responsive to prevailing market dynamics, particularly during peak demand periods when higher-cost plants are dispatched to meet electricity demand,” ERC chairperson and CEO Francis Saturnino Juan said.