The Market Monitor Minding the Nation's Business
The Energy Regulatory Commission (ERC) has ordered a temporary suspension of the Wholesale Electricity Spot Market (WESM) across Luzon, Visayas, and Mindanao to address risks of power supply shortages and price volatility stemming from the ongoing conflict in the Middle East.
The move follows President Ferdinand Marcos Jr.’s issuance of Executive Order 110 declaring a state of national energy emergency due to global oil supply disruptions. ERC said the suspension, effective Thursday last week, was recommended by the Department of Energy to safeguard the adequacy, stability, and reliability of the country’s power supply.
“Accordingly, the ERC determined that immediate regulatory action is necessary to ensure the adequacy, stability, and reliability of the country’s power supply,” the agency said. Operations will begin under Special Operating Guidelines (SOG) issued by DOE, which prioritize dispatch of renewable energy, conserve critical fuel inventories, and provide an operational framework for system dispatch.
All market participants, including the Independent Electricity Market Operator of the Philippines and National Grid Corporation of the Philippines – System Operator, are required to comply.
During the suspension, ERC will implement a Modified Administered Pricing (AP) Mechanism, targeted for finalization by April 1, 2026.
The framework introduces technology-specific pricing: coal plants may receive a fixed rate, natural gas plants based on contracted prices, and renewable sources such as hydro and geothermal under administered pricing with preferential dispatch. Oil-based plants will also be paid based on administered prices when dispatched or contracted.
“The adjusted approach seeks to strike a balance between protecting consumers from excessive price spikes and ensuring that generators remain financially viable to sustain a reliable electricity supply,” ERC Chairperson and CEO Francis Saturnino Juan said.
He emphasized that in times of global energy disruption, the priority is to protect Filipino consumers while maintaining a stable and reliable power system.