Gas and Coal Economics, page-29

You are incorrect. Traders will bid in at range of prices that have nothing to do with marginal fuel costs.

If what you are saying is correct there is no need for minimum or maximum prices because sellers offer electricity at marginal fuel prices, period. Right?

Have a look at "Study of Mitigating Measures for the Philippine Electricity Market" which came out in 2014.

There is a table on page 4 that shows

Yearly LWAP Summary, Ex-Ante, System, 2006-2013
Year Mean Maximum Minimum
2006 5,036.38 62,179.00 (20.42)
2007 4,686.80 30,759.40 (2,568.65)
2008 3,367.03 56,472.60 (102,313.00)
2009 1,951.86 25,058.70 (103,367.00)
2010 7,092.68 57,339.50 (543.21)
2011 4,279.05 64,696.10 (409.64)
2012 5,479.55 64,124.60 (519.49)
2013 6,147.10 64,950.00 (0.48)

The market sets the price from the margin order created by offers. Offers do not necessarily equal marginal fuel cost. Otherwise I will ask you for the magic money tree that pays me 102,313 pesos an hour to burn it.