Designing a Competitive Electricity Market (Abrenica, 2014)
“Years after the Electricity Power Industry Reform Act (EPIRA) marked the departure from a centrally-managed highly regulated structure to a decentralized market oriented system, the expected reduction in electricity prices and the investments boost in the sector have not taken place. This note tries to unravel the reform enigma by focusing on the design, specifically the introduction of competition at the wholesale level while limiting the analysis to trading protocols observed in the wholesale electricity spot market (WESM). Could electricity prices have been lower under a different market design from the one currently applied in WESM? Bidding behavior of market participants are largely influenced by auction design so that the observed behavior in one regime cannot be used to predict the outcomes in another. Thus no one auction design is superior and appropriate to all markets.”
This 2014 policy note by Dr. Joy Abrenica, Associate Professor at the University of the Philippines School of Economics, was heavily cited by Dr. Maria Socorro Gochoco-Bautista in her review of the EPDP paper, as delivered in the RTD. According to Dr. Bautista, the policy note should have been cited in the references of the EPDP paper. “In general, the [EPDP] paper should have a proper review of the literature on the price of electricity in the Philippines,” Bautista further remarked.