WESM reprieve ‘consumers’ victory’

WESM reprieve ‘consumers’ victory’ | Daily Tribune

Consumers will greatly benefit from the decision of the Energy Regulatory Commission to suspend trading in the Wholesale Electricity Spot Market (WESM) during days when a red alert is declared, advocacy group Partners for Affordable & Reliable Energy (PARE) said.

“This is a victory for consumers in light of the continued rising price of goods and services in the market today,” PARE chief advocate officer Nic Satur Jr. said.

Satur said on Friday that the initiative protects consumers from experiencing the immediate effects of unexpected price surges.

However, he said changes in WESM’s trading operations should not be seen as a strategy for the long term as there could be unintended consequences to the ERC’s policy.

“On the other hand, suspending trading in WESM under certain conditions could destabilize the energy market. This could lead to power generators and other market participants withholding supply due to the uncertainty created as a result of the ERC’s policy,” he added.

At this stage, PARE believes long-term solutions should be implemented to increase the available power supply to meet consumer demand.

“These solutions must be anchored in ensuring all available power-generating units are fully operational, enforcing regulations on all stakeholders, and achieving an energy mix that is affordable, reliable, and sustainable to consumers.”

Under the ERC’s directive, there will be no trading in WESM once the National Grid Corporation of the Philippines declares a Red Alert for Luzon and Visayas.

In a separate statement, the Department of Energy (DoE) reiterated that electricity distribution utilities should tap the Anti-Bill Shock Lending Program of the Land Bank of the Philippines (LandBank) to make electricity rates affordable for consumers.

Cheap loans for DUs

Under the Anti-Bill Shock Lending Program, LandBank provides financing to distribution utilities at concessional rates, enabling them to spread out the incremental increases in their customers’ billing by up to nine months without passing the borrowing cost to consumers who cannot afford to pay at full cost.

Launched in April 2023 with an initial fund of P1.5 billion, the Anti-Bill Shock Lending Program provides assistance to narrow and trim down the incremental power cost increase via bridge financing Initiatives of LandBank

Eligible power distributors may loan up to 80 percent of the incremental increase on their power generation and transmission charges, but not to exceed the repayment capacity of the distribution utilities or three times the average billings of its power suppliers.

Borrowers are required to implement their own “anti-bill shock program” to protect their respective clients from the expected increase in electricity bills. The program is available any time of the year.