How do congestion and disruptions in transmission impact electricity prices? This paper investigates the impact of congestion on wholesale spot market prices and the impact of disruption on residential electricity prices. It utilizes time-series transmission node-level data on congestion market prices and combines it with other information on the market network data from the independent electricity market operator for the congestion analysis. Treating congestion as an aberration in the system, this paper applies impulse response analysis to examine the dynamic and cumulative impact of congestion on wholesale electricity spot prices. To examine the impact of disruption on prices, this paper uses distribution unit data submitted to the industry regulator of the Philippines. It exploits an incident in the Visayas that cut transmission capacity in half, causing a disruption in the system as a natural experiment. A synthetic difference-in-differences methodology is employed to examine the effect of this disruption on consumer electricity prices and market concentration. The paper finds that congestions greatly impact market nodal prices, and the effect persists beyond the time of congestion. The impact of the disruption varies by region at the distribution level, possibly explained by the region’s resources and endowment.

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