Regulator wants say on non-contracted power

Business World Online
Posted on March 02, 2012 06:23:31 PM


THE POWER trading platform operator has been told to inform regulators on the sale of electricity in excess of contracted output and at the same time provide ways to facilitate such arrangements.
The Energy Regulatory Commission (ERC), which released the order on Feb. 28, informed the Philippine Electricity Market Corp. (PEMC), operator of the Wholesale Electricity Spot Market (WESM), that giving prior information “could have provided the necessary assistance and guidance [from the ERC] on the expeditious and effective resolution of TeaM Energy’s application.”


The order followed a decision by the PEMC that denied the application of TeaM Energy -- the builder and operator of two coal-fired baseload plants in Luzon -- to trade non-contracted, or excess, power from the 1,200-megawatt (MW) Sual plant in Pangasinan province in the north and the 735-MW Pagbilao facility in Quezon province in the east.


PEMC ruled that TeaM Energy cannot trade in WESM as two other companies have bagged contracts to sell power from the two plants.


San Miguel Global Power Holdings, Inc. and Therma Luzon, Inc. hold the independent power producer administrator contract for Sual and Pagbilao, respectively.


Under WESM rules, only one firm can trade power from a single facility, but it is silent on non-contracted output.


San Miguel Global Power’s contract allows it to sell 1,000 MW, while Therma Luzon’s is 700 MW. TeaM Energy said around 235 MW could have been traded in the WESM and distributed to end-users.


TeaM Energy filed the application to sell excess power in July 2009, but this was denied by the PEMC a year later. The case was haled to the ERC by TeaM Energy on Jan. 24, 2011.


The ERC told PEMC that it should have been informed of the decision as it has oversight functions on the operation of the spot market.


“PEMC should still have notified and informed the commission of its actions on TeaM Energy’s application on the basis of the commission’s over-arching role of guaranteeing that the rules and regulations regarding market operations are complied with,” the ERC said in its order.


Given that the order has been implemented, the regulator said PEMC and TeaM Energy should just discuss the issue of use of non-contracted power with the Energy department, and to provide a progress report on resolving the issue within six months.


“TeaM Energy and PEMC are enjoined to engage in roundtable discussions to resolve this issue in tandem with the Energy department and report in a timely manner the progress of discussions on how to resolve TeaM Energy’s application within a period of six months,” the order stated. -- ENJD