Iloilo City- Primelectric Holdings Inc. is positive that a possible system with financial contracts will keep anxious consumers at ease.
This is in relation with the plans presented to Energy Regulatory Commission to have locked and fixed contracting or forward contracts when purchasing electricity to protect consumers from unstable power rates in the market.
Through the forward contracting system, distributors will fix a deal on power rates through the contract to avoid sudden changes in market price.
According to Primelectric President and CEO, Mr. Roel Z. Castro this will greatly benefit consumers and investors who are anxious about the power rates given the volatile supply especially during the summer months.
“The forward contracts, hedging products and contracts for difference (CFD) can be very helpful in predicting energy prices and avoiding price shocks to consumers. Even for investors, having predictive and “stable” price is what they are looking for. What investors and consumers hate is unstable price and they get surprise when the bill comes. The hedging products, CFD’s and forward contracts will be very helpful and useful. However, the regulatory framework has to be in place. We are happy that the ERC is very responsive of this initiative,” according to Mr. Castro.
According to ERC Chairman and Chief Executive Officer Atty. Francis Saturnino C. Juan the system presented by Green Tiger Markets is considered a “win-win” solution to ensure that the cost of the power from the source is fixed on the day the contract is signed.
This move aims to find the means to lessen the power rates in the midst of unstable power pricing in the Wholesale Electricity Spot Market (WESM).
“For consumer protection, a well-designed framework could allow utilities to mitigate extreme price spikes, contributing to greater price stability, predictability for end-users over time, and avoidance of bill shocks,” says Atty Francis Saturnino Juan.
Atty. Francis Juan shared that this system may still need to be studied if it follows certain guidelines in place as well as if it has certain effects to bilateral contracts in the market.
