Market Power in the Philippine Power Market

Rolando Danao
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Rolando Danao: School of Economics, University of the Philippines Diliman

No 200909, UP School of Economics Discussion Papers from University of the Philippines School of Economics

Abstract: The Philippine electricity market is in a period of transition as the restructuring provisions of the Electric Power Industry Reform Act (EPIRA) of 2001 are being implemented. Under current structure, the market is highly concentrated, indicating the existence of market power. In addition, many plants, including small ones, become pivotal suppliers during peak hours, creating opportunities for the exercise of market power. Concentration in the spot market is even more pronounced as a large percentage of uncontracted capacity belongs to the Independent Power Producers (IPP) with NPC contracts whose energy outputs are under the control of a single company, the Power Sector Assets and Liabilities Management Corporation. This highlights the urgency of speeding up the dominance mitigating provision of EPIRA, namely, the appointment of independent IPP administrators who will trade the IPP outputs in the wholesale market.

Pages: 31 pages
Date: 2009-09
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Published as UPSE Discussion Paper No. 2009-09, September 2009

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