The Aquino administration hinted of pursuing amendments into the Electric Power Industry Reform Act (EPIRA), which top-level people at the energy bureaucracy hinted to be centering on imposing tighter control for the Wholesale Electricity Spot Market (WESM) and setting security capacity to ease brownout conditions in the interim.

No less than Energy Secretary Jose Rene D. Almendras voiced out the government’s intent to push for modifications in the power industry reform law and that these were the subject of brainstorming and briefing he was having with energy officials in the past days.

The proposed tighter control for the spot market, it was noted, will set measures needed to address certain conditions that can trigger unprecedented spikes in WESM prices, especially so since forecasts indicate even tighter supply in the coming months.

Complaints have been lodged in the past months over offers in the spot market nearly breaching the cap, but system operator National Grid Corporation of the Philippines (NGCP) explained that there have been some ‘security limit’ conditions or constraints in the volume or capacity of certain plants set for dispatch. This refers to the maximum generation that can be accepted without compromising system security due to line overloading or system stability. And if generators incur economic losses from such conditions, they do not necessarily send positive signal to investors.

While volatilities are acknowledged to be inherent in electricity spot markets, addressing conditions of that sort are among the areas that the WESM must still improve on either thru rules changes or other forms of policy firming up.

Hence, it was noted that the proposed tighter controls on the WESM will not necessarily mean government intervention; but these shall deal mainly with governance issues like that of the market operators’ powers over investigation of market abuses, as well as in effecting rules changes that will keep it attuned to the evolving needs of the market – even at the time that it will already be turned over to an independent market operator or IMO.

With the advent of open access in the deregulated power industry, questions also arose if WESM can assume legally-binding function to become settlement agent for market imbalances since this is not originally included in its Charter.

Additionally, proposals were made to the new energy chief that government maintains some assets for ‘security capacity’ or facilities that it can run at its discretion primarily when there are base load capacities suddenly taken out from the system for reasons either due to forced outages or maintenance shutdowns.

There are power plants identified to take on ‘security capacity’ function, including the mothballed 850-megawatt Sucat thermal power facility. However, concerns were raised as to the immediate re-powering of that facility since it has not been running for over 10 years now.