Untapped 360MW Awaits Mindanao-WESM

Manila Bulletin

October 14, 2012, 5:20pm

The proposed establishment of an interim Wholesale Electricity Spot Market (WESM) in Mindanao is expected to draw 360 megawatts of untapped supply that may help ease brownout conditions in the energy-starved grid.

Philippine Electricity Market Corporation Melinda L. Ocampo has disclosed that the marching order of Energy Secretary Rene D. Almendras for the setting up of the Interim Mindanao Electricity Market (IMEM) will be May, 2013 or prior to the strike of the summer months when hydro-dependent Mindanao grid hits its most problematic supply condition again.

The IMEM design was presented last Friday to the Mindanao Development Authority (MinDA), which is the government’s collaborating entity in solving the lingering power crisis in the region.

 Ocampo explained that the capacity which may be channeled to the spot market will come from the “over-contracted capacity” of the distribution utilities; while the rest will be from embedded generation facilities. “So it is a combination of demand-side management and market,” she said.

The spot market chief executive expounded that “the DUs have over-contracted capacities but they cannot share it to the grid because there’s no market, so they are just keeping it. From that alone, we may have 180MW, and if we include supply that we can expect from the embedded facilities, it could reach up to 360MW.”

PEMC will need to shell out additional cash for the setting up of the Market Management System (MMS) for Mindanao, but the budget source is something that is being sorted out with the Department of Energy.

Ocampo, nevertheless, laid down realities that massive information drive and consumer education must be undertaken before the proposed spot market in Mindanao becomes operational.

“We need to attune them (Mindanao stakeholders), that’s why what we’ll have is an interim market … it will be a different design because we have to consider a situation that majority of the capacity is hydro and that government is also a majority owner of the plants,” Ocampo stressed.

And given the state of credit-worthiness of purchasing utilities in Mindanao, she asserted that several policy concerns must be resolved prior, especially the staggering P8.0 billion dues of some electric cooperatives in the area to the Power Sector Assets and Liabilities Management Corporation.

“One of the things we pointed out to the Secretary is we have to deal with the behavior of the electric cooperatives, like for some, they have P8 billion unpaid obligations with NPC-PSALM,” she said. (MMV)

With a market in place, non-settlement of obligations is not acceptable therefore PSALM’s direction is being sought on how it shall deal with its EC receivables.

“The market will not work if there are unsettled obligations, so we need the cooperation of all attached agencies. NEA (National Electrification Administration) to take care of the ECs…and for PSALM to set conditions for the utilities’ unpaid obligations,” she said. (MMV)    source