The Energy Regulatory Commission (ERC) has ordered the suspension of the operations of the Wholesale Electricity Spot Market (WESM) across the Luzon, Visayas, and Mindanao grids effective March 26, 2026, as part of urgent government measures to address energy supply risks and price volatility arising from the ongoing geopolitical conflict in the Middle East.
The suspension was issued pursuant to Executive Order No. 110, Series of 2026, which declared a state of national energy emergency due to global fuel supply disruptions and rising oil prices, and in line with a Department of Energy (DOE) letter received on March 25, 2026 recommending the suspension of WESM operations across Luzon, Visayas, and Mindanao, effective March 26, 2026.
Accordingly, the ERC determined that immediate regulatory action is necessary to ensure the adequacy, stability, and reliability of the country’s power supply.
Under the Order, WESM will be temporarily suspended starting March 26, 2026. During this period, the power system will operate under Special Operating Guidelines (SOG) issued by the DOE, which prioritize optimal dispatch of available renewable energy resources, conserve critical fuel inventories amid global fuel supply disruptions, and provide an operational framework for system dispatch.
All market participants, including the Independent Electricity Market Operator of the Philippines (IEMOP) and the National Grid Corporation of the Philippines – System Operator (NGCP-SO), are directed to comply with these interim measures.
During the market suspension, the ERC will implement a Modified Administered Pricing (AP) Mechanism. This mechanism is currently under consultation with stakeholders and is targeted for finalization by April 1, 2026.
The modified AP framework introduces a technology-specific pricing approach to better reflect prevailing fuel costs and ensure the continued operation of power generators.
The modified AP framework introduces a technology-specific pricing approach to better reflect prevailing fuel costs and ensure the continued operation of power generators.
Under the proposed scheme, coal plants may be paid at a fixed rate, natural gas plants based on contracted prices, and renewable energy sources such as hydro and geothermal, under administered pricing with preferential dispatch. Oil-based plants, meanwhile, will be compensated based on administered prices when dispatched or contracted.
The ERC emphasized that the adoption of a modified pricing mechanism is necessary because prevailing historical market prices (i.e., January and February), which would have been the bases of the administered prices under the prevailing rules, would not reflect current conditions marked by geopolitical tensions and fuel supply constraints.
The adjusted approach seeks to strike a balance between protecting consumers from excessive price spikes and ensuring that generators remain financially viable to sustain a reliable electricity supply.
ERC Chairperson and CEO Atty. Francis Saturnino Juan underscored the importance of decisive regulatory action during this period of uncertainty.
“The temporary suspension of the WESM and the implementation of a modified administered pricing mechanism are necessary measures to cushion the impact of volatile fuel prices and safeguard the integrity of our power system.”
“In times of global energy disruption, our priority is clear: to protect Filipino consumers while ensuring that our power supply remains stable and reliable. The temporary suspension of the WESM and the implementation of a modified administered pricing mechanism are necessary measures to cushion the impact of volatile fuel prices and safeguard the integrity of our power system,” Juan stressed.
The WESM suspension will remain in effect until the ERC, in consultation with the DOE, determines that conditions are suitable for the safe resumption of normal market operations.
The ERC assured the public that these measures are temporary and are being implemented to mitigate the impact of global energy disruptions while safeguarding the stability of the Philippine power system.
