With the proposed WESM-Mindanao, staggered payment of past dues sought

by Myrna Velasco July 13, 2016

http://www.mb.com.ph/with-the-proposed-wesm-mindanao-staggered-payment-of-past-dues-sought/

For it not to impede the establishment of a viable Wholesale Electricity Spot Market (WESM) in Mindanao, Aboitiz Power Corporation has indicated that they are willing to discuss with government “staggered payment arrangements” on the dues still outstanding from the defunct interim spot market in the grid.

Aboitiz Power Chief Executive Erramon I. Aboitiz said, “as more plants start coming in, it (WESM) is going to be a requirement. I am not saying forget the debts of the past, but I’m saying, it should not be a hindrance.”

He added “the debt is one thing, but I don’t think that should stop WESM from being implemented.”

For things to move forward, he propounded that “we need to work with government to spread that (payment) over a period of time and let’s not let something as important as WESM in Mindanao be held up.”

Off-taker electric cooperatives in Mindanao still owe some power generators over P80 million in outstanding payments for capacities procured from the discontinued Interim Mindanao Electricity Market (IMEM).

Aboitiz explained “with all the power plants that are coming in – baseload coal-fired plants, they need a WESM to be dispatched economically.”

He emphasized “right now, the dispatch is based on whatever your contracts are to your customers’ requirements, not on economic dispatch – that really has to change.”

Nevertheless, the Aboitiz Power chief executive qualified that in the process of setting up the spot market that shall replace the IMEM, the oversights of the past should not also be missed out on – instead, the relevant stakeholders should draw critical lessons from them.

Aboitiz stressed “we have to look at why it failed in Mindanao. Clearly at that time, the problem was, there was no adequate supply, so everybody was just consuming and taking whatever power is given away and they said, no that’s not our problem, we have our contracts with NPC (National Power Corporation), so there were arguments.”

He further reckoned “when we have adequate supply, adequate capacity in the system – like in Visayas and Luzon, people know who are the guys dispatching, who are responsible for what they are paying for. So I think it would be different compared to before when there was such a large shortage of capacity.”

WESM operator Philippine Electricity Market Corporation (PEMC) earlier told reporters that they are developing a new roadmap for the installation of a power spot market in Mindanao.