Despite the friction between San Miguel Corp. and the Energy Regulatory Commission over the power supply agreement which was suspended by a Court of Appeals' temporary restraining order, only a slight increase, at the most, is expected in power rates.

Spot market operator Independent Electricity Market Operator of the Philippines said Wednesday that power prices at the Wholesale Electricity or WESM may inch up only slightly this month due to higher demand as the Holidays near.

Higher prices at the spot market may not even reflect on monthly bills as electricity distributor Manila Electric Company wrote San Miguel Corp for its conglomerate unit to shoulder the difference between the Wholesale Electricity Spot Market price and the contract price under the PSA.

SMC paying for the price difference will prevent Meralco from passing on the increased cost to the monthly power bills during the duration of the TRO or Writ of Injunction if any is issued.

Meralco said the collectible from SMC will be "in addition to all applicable fines, penalties and liquidated damages under the PSA in the event that the CA eventually resolves the main case denying the Petition for Certiorari and/or claim of SPPC."

However, prices may still be tempered if power plants will operate normally throughout the month to avoid thinning power supply and demand margin.

"Data shows that during almost half of December, we can see some spikes and I think our price now is around P8. For December, it may reach P9 based on the indication but we'll see what happens," Isidro Cacho, IEMOP Head of the Corporate Strategy and Communications Department, told reporters in a media briefing on Wednesday.

"Hopefully, no untoward forced outages again that results in tightening of supply in the market because that's a major issue," he said.

The market operator observed an increase in the December spot prices, which amounted to approximately P9.12 per kilowatt-hour as of 11 December.

Last month, WESM prices declined by an average of P8.53 per kilowatt hour, or around 7.48 percent lower than the previous month's P9.22/kWh record.

The interaction of demand and supply resulted in the system demand level diminishing by 4.21 percent and amounted to around 10,355 megawatts.

Regional demand levels followed suit as the figures for the Luzon and Visayas average demand reduced to 8,659 MW from 9,075 MW and 1,696 MW from 1,734 MW, respectively.

At the same time, the supply level met a slight increase by 1.58 percent or averaging 13,691 MW — with coal remaining to be the major player in the generation mix.

No need for cap
The margin greatly improved by 25.04 percent compared to October and resulted in lesser instances of Secondary Price Cap impositions, a mitigating measure to protect consumers against sustained high WESM prices.

According to Cacho, IEMOP is actively coordinating with the Department of Energy and the Energy Regulatory Commission to help stabilize electricity prices in the market.

He said efforts include active and dynamic coordination with its participants on matters related to the pilot testing of the retail aggregation and Renewable Energy Market, to name a few.