Electricity consumers could face higher power costs after wholesale electricity prices jumped in June as tighter regional supply and persistent power plant outages drove up prices in the Wholesale Electricity Spot Market (WESM).
The Independent Electricity Market Operator of the Philippines (IEMOP) said Thursday that the system-wide average spot market price rose 22.7 percent to P9.56 per kilowatt-hour (kWh) in June from P7.79 per kWh in May, despite lower average electricity supply and demand during the billing period.
IEMOP Vice President for Trading Operations Isidro Cacho Jr. noted that the localized supply shortages in the Visayas and Mindanao, along with reserve deficiencies and limited transmission of lower-cost electricity from Luzon, pushed wholesale prices higher across all three major grids.
“June was a volatile month for the WESM. While the country had sufficient supply overall, outages, reserve shortages, and transmission limitations created tighter conditions in some regions. Market prices reflected these conditions and showed where additional supply, reserves, and transmission capacity were most needed,” Cacho added.
Since WESM prices is part of the generation charge passed on by distribution utilities, sustained increases could translate to higher electricity bills for consumers.
In Luzon, the average market price rose 13.3 percent to P7.95 per kWh from P7.02 per kWh despite higher supply and lower demand, as forced outages at several large power plants kept market conditions tight.
The Visayas posted the biggest increase, with average prices jumping 41.7 percent to P14.46 per kWh from P10.20 per kWh after supply fell faster than demand. Multiple yellow and red alerts, generation shortfalls, and reserve deficiencies also pushed prices higher.
Mindanao's average market price climbed 37.5 percent to P12.75 per kWh from P9.28 per kWh as outages at major generating units reduced available supply.
IEMOP said transmission constraints also widened price differences across the grids.
The Leyte-Luzon HVDC interconnection operated at its transfer limit or under security restrictions for 67.46 percent of June, up from 46.06 percent in May, limiting the flow of cheaper Luzon power to the Visayas.
The Mindanao-Visayas HVDC link also ran at its maximum transfer capacity for 39.36 percent of the billing period.
Power plant outages remained elevated throughout June. Peak forced outages reached 3,060.5 MW in Luzon, 2,295.23 MW in the Visayas, and 1,186.7 MW in Mindanao.
Although the spot market's share of electricity traded fell to 15.1 percent from 17 percent in May, the value of transactions increased to P36.57 billion from P29.50 billion because of higher electricity prices.
