Electricity market for Mindanao planned

Business World Online

Posted on September 17, 2012 09:34:56 PM

THE ENERGY department is looking at establishing an electricity market platform in Mindanao by yearend or early 2013 to alleviate the power crisis and to assure investors that power supply contracts will be properly sold.

"We’re finalizing the Mindanao road map on our recommendation on how best to resolve the Mindanao crisis. We are looking at some interim market mechanisms. Part of it is the Interim Mindanao Electricity Market (IMEM). Ideally, you want to have it late this year or early next year," Energy Secretary Jose Rene D. Almendras told reporters yesterday.

He said IMEM is different from Wholesale Electricity Spot Market (WESM) because it is only for spot electricity and prices are dictated by supply and demand. On the other hand, IMEM is an electricity market for distribution utilities (DUs) and electric cooperatives (ECs) to contract power supply from generators.

"Everything will be included. It will be a whole package. Right now, there are people who want to build diesel generating facilities in Mindanao to stop gap the shortages but there are no contracts. So it is a real problem, we need to create an environment that the electricity will be moved, will be traded," Mr. Almendras said.

The Energy official added that DUs and ECs will not be mandated to join but depending on their need of power supply contracts.

Details of the IMEM and the whole road map are still being finalized and are targeted to be presented to President Benigno S. C. Aquino III in three weeks.

"We hope to present to the President the Mindanao road map in three weeks. We are looking at mechanisms. The road map is very critical because it’s not just a solution, it’s a structural market solution," Mr. Almendras said.

Meanwhile, the Energy department is also looking at reformatting the management of ECs in Mindanao according to the National Electrification Administration (NEA) Bill pending in Congress to avoid incurring debts. As of June 30, the official said ECs in Mindanao have a debt of P13.477 billion.

"We are changing the charter of the NEA because the role of NEA is shifting. The Epira Law changed the function of the DoE, created the ERC (Energy Regulatory Commission) and a whole bunch of institutions," Mr. Almendras said -- Danessa O. Rivera    source