Negative WESM prices cut gen charge
‘We are consistently keeping a close watch on how the electricity market is moving to make sure price signals remain reflective of actual system conditions while protecting the welfare of consumers’
Text size
‘We are consistently keeping a close watch on how the electricity market is moving to make sure price signals remain reflective of actual system conditions while protecting the welfare of consumers’
Generation charges, a key component of electricity bills, are seen to slightly ease after the Wholesale Electricity Spot Market (WESM) recorded a one-day drop to negative prices, according to the Energy Regulatory Commission.
The ERC said on Thursday that negative average prices were registered across the Luzon, Visayas and Mindanao grids on 18 April due to lower electricity demand during the holidays and high supply availability.
Previous instances of negative prices were recorded on 25 December 2024, at an average of -P1.9338 per kilowatt-hour (/kWh); on 1 January at -P0.5592/kWh; and most recently, on 18 April, at -P0.4014/kWh.
The April pricing will be reflected in consumer power bills for the April billing month. On that day, electricity supply reached 21,469 megawatts (MW), while demand stood at 12,092 MW.
“Negative pricing, while rare, is declared in the WESM to reflect market conditions and encourage flexible generation and demand-side participation,” the ERC said.
These price drops have contributed to a downward trend in generation charges, which form a significant component of electricity bills.
Through our regular analysis of market trends, the Commission stays committed to its mission of promoting a competitive, transparent, and efficient energy sector that works toward reliable and affordable electricity for all Filipinos.
However, the ERC cautioned that the impact on consumer power bills would vary, depending on each distribution utility’s supply mix and their exposure to the spot market.
“We are consistently keeping a close watch on how the electricity market is moving to make sure price signals remain reflective of actual system conditions while protecting the welfare of consumers,” ERC chairperson and CEO Monalisa C. Dimalanta said.
“Through our regular analysis of market trends, the Commission stays committed to its mission of promoting a competitive, transparent, and efficient energy sector that works toward reliable and affordable electricity for all Filipinos,” Dimalanta added.
Despite the negative energy prices, costs in the Reserve Market remain elevated, indicating a continuing need for increased system resources to maintain grid stability.
From 14 to 20 April, average reserve prices were recorded at P5,453 per megawatt-hour (/MWh) in Luzon, P12,859/MWh in Visayas, and P14,763/MWh in Mindanao.
The ERC also flagged that prolonged low prices in the energy market may negatively affect the Feed-in Tariff Allowance fund, which supports payments to renewable energy developers.
As of April, coal remains the dominant power source, accounting for 63.23% of total generation, followed by natural gas at 14.34 percent.
