January 12, 2023

MBC: electricity price cap may be curtailing new investments

The Makati Business Club (MBC) on Wednesday said it was backing the review of three major government policies concerning the electricity sector, supporting these measures that are among the initiatives of the Energy Regulatory Commission (ERC).

The ERC received the support of the MBC on its review of the secondary price cap mechanism in the Wholesale Electricity Spot Market (WESM), which was last amended in 2021 to make changes on the preemptive mitigating measure.

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Back then, the regulatory body lowered the rolling average period, which stands as the trigger for the price cap, from five to three days.

It also included in the amendments the regional and island imposition of secondary price cap mechanism, which shall be applied when the grid interconnection is on outage.

The MBC noted that the secondary price cap mechanism may be designed to moderate price hikes but may be curtailing new investments in the energy sector.

The business group said it was also supporting the review of the rules on open access transmission service, which was also amended in June of last year.

The measure is meant to allow consumers to choose their power supplier but has not gained much ground, according to the MBC.

Recent ERC amendments simplified the charges being passed on to consumers through several changes, including those covering interruption and curtailment billing adjustment provisions.

—Alden M. Monzon

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