ERC tweaks WESM settlement mechanism

The Energy Regulatory Commission (ERC) has revised settlement rules in the Wholesale Electricity Spot Market (WESM) under emergency power measures through a new resolution. 

The Resolution No. 14, Series of 2026. provides clarificatory guidelines on the implementation of the Modified Administered Price (MAP) following the declaration of a State of National Energy Emergency under Executive Order No. 110.

ERC Chairperson and CEO Atty. Francis Saturnino C. Juan said Friday the resolution addresses operational and settlement concerns raised by industry stakeholders during the recent WESM suspension and clarifies how electricity transactions will be treated during the period.

“This Resolution ensures that extraordinary market conditions are managed in a fair, transparent, and orderly manner. By clarifying settlement rules and addressing unintended cost exposures, we are protecting consumers from unnecessary price volatility while preserving the integrity of the electricity market,” Juan said.

Under the revised rules, the ERC introduced a one-time Bilateral Contract Quantity redeclaration mechanism for coal-fired power plants that were available but unable to fully dispatch due to instructions from the System Operator during the WESM suspension.

The mechanism allows affected coal plants and their counterparties to realign contracted energy volumes with actual electricity dispatched during the period.

The ERC, however, said any financial exposure arising from the redeclaration “shall be borne by the coal-fired power plant in favor of its counterparty.”

The Commission also retained the existing settlement treatment for the Kalayaan Pump Storage Power Plant, with transactions to continue to be settled at the customer-administered price.

At the same time, the ERC authorized KPSPP to seek additional compensation for pumping operations carried out upon instruction of the National Grid Corp. of the Philippines, recognizing the plant’s role in supporting grid stability during the suspension period.