The Energy Regulatory Commission (ERC) has approved, with conditions, the application of the Independent Electricity Market Operator of the Philippines (IEMOP) to collect additional transaction fees to support the rollout of a new electricity market system over the next four years.

The approval covers funding for the Electricity Market Management System (IEMMS) from 2025 to 2028, which will replace the existing Market Management System (MMS) currently used in the Wholesale Electricity Spot Market (WESM).

Under the ERC decision, IEMOP is authorized to charge an additional transaction fee to WESM-registered generation companies, starting with a rate of PHP 0.00265 per kilowatt-hour (kWh) for 2025, to be collected over 12 months beginning January 2026.

The Commission also set the approved transaction fees for the succeeding years at PHP 0.00123/kWh for 2026, PHP 0.00106/kWh for 2027, and PHP 0.00081/kWh for 2028, subject to annual collection caps to prevent overrecovery.

To limit the total amount collected, the ERC imposed ceilings of PHP 364.91 million for 2025, PHP 187.85 million for 2026, PHP 169.98 million for 2027, and PHP 136.29 million for 2028, stressing that IEMOP must not collect beyond these approved amounts.

IEMOP filed the application in May 2025, proposing to recover a total budget of PHP 1.01 billion for the development and operation of the new system. Prior to the final ruling, the ERC granted interim authority in August 2025, allowing IEMOP to collect fees at a higher rate until the end of the year.

According to the ERC, IEMOP cited recurring software issues, performance degradation, and cybersecurity risks affecting the existing MMS as justification for the transition to a new platform. The Commission said the IEMMS is expected to support evolving market mechanisms, including the Capacity Market and Day-Ahead Market.

The ERC also directed IEMOP to adopt ISO 27001-compliant security controls, ensure a controlled transition between systems, and properly dispose of the existing MMS due to the sensitivity of market data.

As the power sector moves toward more complex trading mechanisms, how will the new market system and additional transaction fees affect the efficiency and cost structure of electricity trading in the country?

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