Business World Online
Posted on 10:04 PM, October 21, 2010
BEFORE implementing the wholesale spot market in the Visayas, the Philippine Electricity Market Corp. (PEMC) must first provide the Energy Regulatory Commission (ERC) with pricing mechanisms it would use in the market.
The regulatory body ordered PEMC to file with the regulator any possible amendments to the wholesale electricity spot market (WESM) rules and to supplement its existing market fee application to include prices in the Visayas.
"The PEMC is hereby directed to formulate price mitigating measures that should apply to the WESM in the Visayas grid, which may be in the form of price caps, bid caps, price thresholds or any other mechanism to mitigate potential volatile market prices upon the ordinary end user in the Visayas grid," ERC said in its order dated Oct. 4.
PEMC could not be reached for a comment on commission’s order.
ERC said it took judicial notice of comments made by Department of Energy (DoE) officials to the media on the planned opening of the Visayas WESM, and ordered PEMC and DoE to make certain it has filed all the necessary cases with the regulator to ensure the implementation of the electricity spot market scheme in the Visayas.
Energy Secretary Jose Rene D. Almendras previously stated that the WESM Visayas may be implemented by November this year.
Originally, WESM Visayas was to have been implemented September this year but electric cooperatives in the region said Visayas is not yet ready for the WESM.
The cooperatives stated there is not enough supply in the region which would push the prices in the markets very high because of the high demand for power.
However, the Energy Department said there are new generating capacities awaiting entry into the Visayas grid. These are from the 246 megawatts (MW) coal fired power plant of Cebu Energy Development Corp., and the 164 MW coal power plant of Panay Energy Development Corp. Both expected to come online this year.
The WESM is a venue for power producers and buyers of electricity like distribution utilities to trade electricity as a commodity. Prices in the WESM are subject to market forces.
WESM commercial operations in Luzon involve 27 trading teams, 14 registered customers, and six electric cooperatives, based on a report released by the Energy department early this month detailing the accomplishments of Republic Act No. 9136, or the Electric Power Industry Reform Act of 2001 (EPIRA).
Under section 30 of the EPIRA, WESM operations in Visayas should have started within a few years of commercial operations of WESM Luzon. WESM Luzon began operations in 2006. -- Emilia Narni J. David
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