Philippines suspends spot electricity sales due to Middle East conflict

The Philippines announced on Thursday that it had suspended the sale of electricity at spot prices until further notice due to fuel supply risks and price volatility caused by Iran's war.

The suspension was ordered by a decree declaring a national energy emergency in order to deal with fallout of the war, including disruptions in fuel procurement.

The Energy Regulatory Commission (ERC) of the country said that it expected to finalise its modified pricing scheme by April 1.

This suspension is in line with plans announced by Energy Secretary Sharon Garin in an article published this month, where she said that the government would intervene on the market to prevent a projected surge of 16% in electricity bills.

The commission stated that a new pricing scheme is being implemented as the historical market prices "no longer reflect current conditions marked by geopolitical strains and fuel supply restrictions".

It said that during the suspension of the power system, guidelines will be used to 'prioritise renewable energy' and conserve the critical fuel inventory.

A statement by the commission stated that "Coal plants can be paid at a set rate and natural gas plants on contract prices."

The statement stated that it 'expects' the suspension to?remain until?the market conditions are safe for a return to normal operations. (Reporting and editing by Edwina G. Gibbs; Sudarshan V. Varadhan)

(source: Reuters)