The Department of Energy (DoE) is likely to tighten the provisions in power sales contracts between power sellers and distributors to protect consumers from unexpected hikes in electricity prices. Accordingly, the department may ask power generators and the Manila Electric Company to include the provision of replacement power in their contracts. This means that in the event of a sudden power failure, the power generator must source the same amount of replacement power from the country’s Wholesale Electricity Spot Market to ensure that it holds up its contractual volume commitment to the distributor. Under the existing contracts, the replacement power provision is optional.
