WESM operator seeks additional increase in fees

Manila Times.net
Published : Tuesday, September 20, 2011 00:00
Written by : Euan Paulo C. Añonuevo


THE Philippine Electricity Market Corp. (PEMC) has asked regulators for an increase in annual fees charged to power suppliers to fund the spot-market operator’s computer system upgrade project.
In a petition to the Energy Regulatory Commission, PEMC sought an increase in market fees that would allow the company to generate P841.05 million for the funding of a new market management system for the Wholesale Electricity Spot Market (WESM).


“The NMMS shall replace the existing MMS which has been in operation for more than five years and has reached its end of economic life,” it said.


The WESM is a trading platform for power suppliers and bulk electricity consumers in Luzon and the Visayas. Electricity is traded in the spot market by the hour while prices are dictated by market conditions.


The MMS is the computer system, consisting of both hardware and software components, which facilitates the trading, dispatch and subsequent settlement of transactions in the WESM.


The ERC earlier granted PEMC an increase of P0.0015 per kilowatt-hour in market fees to upgrade the MMS, which had been showing signs of wear and tear.


PEMC’s negotiations with supplier ABB Inc., however, bogged down. As a result, the ERC ordered a refund of additional market fees.


Based on PEMC’s new petition, it would need an average increase in fees of P0.0048 per kilowatt-hour from 2011 to 2013 on top of the existing P0.0144 per kilowatt-hour market rate.


“The foregoing amount shall be recovered from generators in both Luzon and Visayas according to the volume traded by each in the WESM energy market,” PEMC said.


The NMMS is expected to improve on the features and functions of the MMS such as the reduction of trading interval from one hour to 30 minutes, report non-complying power plants, forecast real time supply forecast up to four hours, implement outage schedules, among others.


PEMC also asked the regulator to allow using the unused portion of WESM’s 2010 market fees worth P119.54 million to fund part of the cost of the NMMS, which would reduce the total amount it would need to P748.03 million.