Power reserve market back in full operations

MANILA, Philippines — After nearly four months, the reserve market is set to resume full commercial operations after the Energy Regulatory Commission (ERC) lifted the trading suspension.

The ERC has ordered the lifting of the suspension in the billing and settlement of the price determination methodology (PDM) in the co-optimized energy and reserve in the wholesale electricity spot market (WESM).

The PDM is a mechanism designed to determine the prices and settlements in the power spot market.

In a notice of resolution dated July 26, the commission said there are no reasons to extend the suspension of reserve market activities following the compliance of the WESM operator and governing body.

The Philippine Electricity Market Corp. (PEMC) and the Independent Electricity Market Operator of the Philippines (IEMOP) have complied with ERC’s directives for the evaluation of their application for the proposed amended PDM.

“Further, the commission extended the interim relief it granted for the adoption and implementation of the proposed PDM, but with additional conditions,” the ERC said.

The IEMOP was also ordered to recalculate the resulting reserve trading amounts for the billing periods of February to March 2024 and make the necessary adjustments for the remaining 70 percent for the March billing month.

The ERC ordered the suspension of billing and settlement at the reserve market in March, two months after its full commercialization, following significant price increases in reserve costs during the month compared to February.

The suspension on settlement amounts was partially lifted in May to allow power generators to recover a portion of the costs for trading transactions during the March billing month.

The decision to allow the settlement of 30 percent of the transaction amounts was made to ensure continuous operations of power generators providing reserves in the system.