Tuesday, January 17, 2017

DOE pushes for lower secondary cap in WESM

Published January 10, 2017, 10:00 PM by Myrna M. Velasco

Aligning it as one of the contingency measures during the 20-day Malampaya shutdown, the Department of Energy (DOE) is pushing for review and probable lowering of the prevailing P6.245 per kilowatt hour (kWh) secondary cap in the Wholesale Electricity Spot Market (WESM).

In a statement to the media, the energy department said that it sets to review “how to lower the secondary price cap in the WESM” – but that shall come with the imprimatur of the Energy Regulatory Commission.

The current secondary cap at P6.245 per kWh kicks in once the price threshold of P9.00 per kWh is hit within 168-hour trading duration or on the prescribed seven-day rolling average. The primary cap in the electricity spot market is at P32 per kWh.

Energy Undersecretary Felix William Fuentebella, the designated coordinator of the Malampaya shutdown measures, said there is no specific figure yet as to how much lower they would want the WESM secondary cap be.

To further cushion cost impact on consumers of the Malampaya downtime-induced supply tightness, the DOE is also proposing to stagger additional generation charge payments to plants with more expensive fuels, such as the diesel-fired facilities.

The government further assured that it will run the 650-megawatt Malaya thermal power facility to augment power grids’ electricity supply during the gas production platform’s maintenance period.

Malaya plant’s committed capacity run is at 470 megawatts, according to a statement issued by the energy department to the media.

The failure of running the Malaya plant as must-run unit (MRU) during the 2013 Malampaya shutdown had triggered extreme supply tightness in Luzon grid, hence, igniting unwarranted spikes in prices during that time.

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