AFTER FACING much delays and opposition, the wholesale electricity spot market (WESM) will finally start operations in the Visayas on December 26, a move seen to finally end the spate of rotating brownouts plaguing the islands since last year.
Energy Secretary Jose Rene D. Almendras said he has assured power consumers in the Visayas that the brownouts would stop with the establishment of WESM since there was a generation capacity of 200 megawatts that was not being brought to the market due to the lack of pricing mechanism.
WESM, which will be operated by Philippine Electricity Market Corp. (PEMC), runs similarly as the Philippine Stock Exchange except that it trades electricity. Its significance is due to the fact that it will provide power-generation companies an assured platform where they can sell their electricity to distribution utilities and cooperatives at competitive prices.
Almendras admitted that initially, power consumers may have to bear with spikes in electricity prices at the WESM until the full capacities of all the new power plants have come in within the first quarter of next year.
However, he said the DOE would be proposing some measures next year “to make sure that market efficiencies can work better.”
“What we need to have [are] structures and mechanisms that will create a fail-safe process to identify those [price] spikes as soon as we can,” he added.
Almendras said electric cooperatives—which earlier raised concerns that power prices would increase once the WESM kicks in—have finally understood how this mechanism could benefit all stakeholders.
The Philippine Independent Power Producers Association (Pippa), the Cebu Chamber of Commerce and Aboitiz Power Corp. were among those that have been vocally rallying for the establishment of WESM Visayas.
Ray Cunningham, vice president for business development at Aboitiz Power, stressed in a presentation last year that a viable WESM was crucial to investments in new, cost-effective power-generation projects.
The ideal move, Cunningham earlier explained, was for the government to fast-track the implementation of the WESM within the year and to integrate it with the Luzon WESM. He added that the government should likewise move to initiate a Mindanao WESM no later than mid-2011.
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