CANE POINTS: IEMOP Sheds Light on December Increase in WESM Prices

The Independent Electricity Market Operators of the Philippines (IEMOP) has issued a statement explaining why the Wholesale Electricity Spot Market (WESM) prices in the Visayas increased for the billing month of December.

It can be recalled that Negros Power cited the increase in WESM prices as the primary cause of the ₱1.0635 kilowatt-hour (kWh) increase in Negros Power’s rates for December, compared to November.

What is IEMOP? Why should consumers listen to what it has to say about power rates?

The IEMOP, according to its website, “facilitates electricity trade in the Philippine electric power industry as the Independent Market Operator of the WESM”. In short, it runs or operates the WESM “under the policy and regulatory oversight of the Department of Energy (DOE) and the Energy Regulatory Commission (ERC)”.

By “independent”, it means the IEMOP is not in any way related to or affiliated with companies that trade at the WESM. It is neutral; it does not profit whether WESM prices rise or fall. And even though the IEMOP is “independent”, it cannot simply do whatever it wants, but it has to operate under the rules set forth by the DOE and the ERC.

The IEMOP’s statement dated January 28 says that the overall average power supply for December 2025 increased a little by 1.2% compared to November 2025, while electricity demand also decreased by 0.5%, thereby providing a wider “overall system supply margin of 4,798 MW, up from 4,572 MW in November”.

That’s the overall picture. However, in the Visayas and Mindanao grids, the gap between electricity supply and demand decreased by 136 MW and 245 MW, respectively, because of power supply was diminished by the planned and forced (unplanned) outages of power generating plants.

In the Visayas, the available power supply was 106 MW higher than the previous billing month of November, but this increase was eaten up by the 181 MW increase in electricity demand, consequently lowering the supply-demand margin. High demand amid low supply results to higher price.

“These tighter regional conditions, combined with transmission constraints that limited access to lower-cost generation in Luzon, contributed to an increase in system-wide average energy price to 4.38 PHP/kWh, from 3.98 PHP/kWh in the previous billing month, IEMOP stated.

The Visayas grid normally imports low-cost power from Luzon, lowering the average power cost for the Visayas grid. However, for majority (almost 70% of the time) of the billing month of December, the Luzon to Visayas interconnection was either operating at its maximum transfer limit of 250 MW or was offline due to system maintenance.

Instead of fully availing of 100% services of low-cost power imports from Luzon, the Visayas grid availed of it for only 31% of the December billing period, compared to 66% availment during the November billing period.

Due to the reduction in available power supply and the spike in electricity demand, coupled with the lower availability of low-cost power imports from Luzon, WESM prices in the Visayas grid inevitably increased, and this increase was passed on by the distribution utilities to all consumers in the Visayas grid.* (BB)