The Energy Regulatory Commission (ERC) has halted the trading in the Wholesale Electricity Spot Market (WESM) across Luzon, Visayas, and Mindanao, responding to rapid increases in power costs triggered by disruptions in fuel supplies.
The suspension, effective March 25, comes as authorities seek to prevent electricity prices from surpassing P9 per kilowatt-hour amid instability linked to the ongoing Middle East conflict.
This move follows a presidential executive order declaring a national energy emergency, a measure prompted by the war in Iran that has destabilized fuel procurement and pushed energy prices upward. The ERC stated that the market’s pricing structure no longer suited the current environment, as market prices have diverged from actual supply and demand conditions due to geopolitical risks and fuel shortages.
In place of normal market trading, the regulator will introduce a new administered pricing scheme, expected to be in effect by April 1. Under this system, coal power plants will receive a fixed tariff, while natural gas operations will be paid according to their agreed contracts. Hydroelectric and geothermal producers will benefit from administered pricing with dispatch priority, and oil-fueled plants will be compensated according to administered prices when required or contracted into the supply mix.
The temporary mechanism is intended to steer electricity dispatch toward renewable sources while protecting vital fuel reserves across the grid. The ERC will maintain these emergency measures until stability returns, allowing for a safe restoration of standard market operations.
