Published March 23, 2017, 10:01 PM By Myrna M.
Velasco
A transition team is being formed by
the Department of Energy (DOE) to finally set to fruition the installation of a
private Independent Market Operator (IMO) for the country’s Wholesale
Electricity Spot Market (WESM).
This will also be in tandem with the
plan of the department to tap the United States Agency for International Development
(USAID) to study and determine the appropriate structure of the IMO that shall
man the spot market at its continued existence in the deregulated power
industry.
It was gathered that for the
meantime, Philippine Electricity Market Corporation (PEMC) Melinda L. Ocampo
will stay on as president, but only during the transition phase.
It is not specified yet how long
that will take, although Energy Secretary Alfonso G. Cusi has been indicating
that he wants the IMO shift accomplished as soon as possible – and that
timeline was originally targeted first half of this year.
He just hinted to media last week
that he already “reached the point” in which the department needed to decide
for the long-term fate of the WESM under an independent operating entity.
The DOE had earlier undertaken an
audit on WESM’s operations and that has been its take-off point in recommending
the transposition to IMO phase.
While traversing that transition,
PEMC is also preoccupied with several enhancements of the spot market – including
the proposed establishment of WESM in Mindanao.
That is still fraught with several
concerns, but the tricky ones would be matters that will be up for decision of
the energy department.
So far, for Luzon and Visayas grids,
cost efficiencies are now being reaped based on the pricing trends manifesting
at the spot market.
According to the WESM operator,
settlement prices reached basement level of R1.90 per kilowatt-hour (kWh) in
this year’s January supply month; and also relatively low in February even with
supply tightening events triggered by the shutdown of the Malampaya gas
production facility.
Within the period, it was noted that
spot supply procurement had also gone up to a record 23 percent level, which
was logged to have been the highest since December, 2006.
WESM is further treading into having
its information technology (IT) platform enhanced with the anticipated
commercial commissioning of its new market management system (NMMS) by June
this year.
Meanwhile, the proposed
establishment of Wholesale Electricity Spot Market (WESM) in Mindanao is still
tangled with somewhat “difficult to understand and resolve” concerns, according
to the Philippine Electricity Market Corporation.
But at the end of the day, according
to PEMC President Melinda L. Ocampo, “it will be up to the DOE (Department of
Energy) to decide” as to the fate of the planned integration of Mindanao spot
market to the existing ones in Luzon and Visayas grids.
She noted that they will submit
corresponding report to the department as to the outcome of stakeholder
consultations on the propounded WESM in the southernmost power grid.
Ocampo said “PEMC has been fully
supportive of the government’s plan to launch WESM in Mindanao that will
address the supply concern and clamor from the generation sector in setting up
a mechanism that will foster transparency and rationale pricing of electricity
in the region.”
Among the contentious concerns, it
was noted, had been the proposal of the Association of Mindanao Rural Electric
Cooperatives, Inc. (AMRECO) for it to be Mindanao-WESM’s operator; and the
claims that it would be illegal yet to have a spot market in the grid pending
its transmission interconnection to Luzon and Visayas electricity systems.
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