November 24, 2017
THE Philippine Electricity Market
Corp. (PEMC), the entity that operates the wholesale electricity spot market
(WESM), has called on industry stakeholders to submit their comments on the
draft circular that seeks to establish a similar market in Mindanao.
“We are on test operations [in
Mindanao], so PEMC is continuously looking at what’s going on and the status of
the actual operations,” said Jose M. Layug, Jr., one of the members of the
five-man transition committee set up in July after PEMC officials were asked to
resign.
On Thursday, PEMC solicited comment
until Dec. 4, 2017 on the proposed Mindanao WESM transition committee. WESM is
the centralized venue for buyers and sellers to trade electricity as a
commodity where its prices are based on actual use, or demand, and
availability, or supply.
Mr. Layug said Mindanao has to enjoy
the benefits of having an electricity spot market, including what he claims to
be cheaper power costs as WESM trading classifies renewable energy sources such
as solar and wind as priority and must be dispatched first. The dispatch
hierarchy displaces power sourced from, say, the costlier diesel-fired plants.
“Mindanao is not able to enjoy the
benefit of FiT [feed-in-tariff] savings because they are not yet connected.
They are not part of the market. So we’re pushing hard to make sure that
Mindanao WESM will be in place already, fully,” he said.
He placed the savings at P20 billion
for Luzon and the Visayas, which he said translates to 8.6 centavos per
kilowatt-hour.
“So far, we are on target,” he said.
“By next year, [it must be operating fully].”
“We’re doing good. The five-man transition
committee is serious in meeting its deadline by Feb. 2018, so far all our
commitments to the [Department of Energy] Secretary Alfonso G. Cusi, we’re
trying to meet that,” he said.
Mr. Layug was referring to the term
set for the PEMC transition committee, which was created in a DoE order “to
assess PEMC’s existing structures, systems, and resources and propose a way
forward for the WESM to meet the challenges ahead. The order gives the
committee seven months from August 1, 2017 to complete its tasks.”
He said the commitments include PEMC
becoming an independent market operator (IMO).
“Part of the IMO structure is, there
will be a search on who will lead both PEMC and IMO,” he said.
Asked if the upcoming top official
will come from the transition team, Mr. Layug said: “Not me, definitely. I
don’t think any of the transition team has expressed interest. But let’s see, I
don’t want to answer for them. But definitely not me. I’m not interested in the
job. I’m there to help Sec. Cusi put in place what the law mandates.”
Under the DoE draft circular, a
transition committee is to be created to support Mindanao’s shift to WESM.
The committee is to be composed of
one member each from an electric cooperative, private distribution utility,
embedded generator, conventional grid-connected generator, and renewable energy
grid-connected generator. The market operator and the Mindanao system operator
will also have one member each. Two members will come from the independent
sector. They will elect from among themselves the committee chairperson.
The creation of WESM in Mindanao is
called for under Republic Act No. 9136, otherwise known as the Electric Power
Industry Reform Act of 2001 (EPIRA).
“Consistent with what is mandated by
EPIRA, we should have done this a long time ago, we’re working on having that
structure where you have a truly independent market operator and PEMC will be
your governing company, much like the structure of PSE (Philippine Stock
Exchange) and SEC (Securities and Exchange Commission),” Mr. Layug said. —
Victor V. Saulon
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