ERC orders Mindanao DUs to comply with WESM requirements

Published November 26, 2019, 10:00 PM By Myrna M. Velasco

https://business.mb.com.ph/2019/11/26/erc-orders-mindanao-dus-to-comply-with-wesm-requirements/

To step up the long-awaited establishment of Wholesale Electricity Spot Market (WESM) in Mindanao, the Energy Regulatory Commission (ERC) has directed all distribution utilities (DUs) in the grid to comply with all the enforced requirements.

The industry regulator noted this will “ensure the overall readiness of the systems and procedures towards the shift to a new system and environment.”

As noted by ERC Chairperson Agnes T. Devanadera, “there was a delay in the completion of WESM registration by the participants in Mindanao, despite the mandatory membership as provided for by the WESM rules.”

Given that snag, the ERC is now calling on all DUs in Mindanao grid “to comply with all the WESM prerequisites and to strictly follow the Interim Mindanao Dispatch Protocol (IMDP).”

In the WESM Mindanao Readiness Assessment (WMRA) carried out by the regulatory body, “the low turnout of participants in the trial operations program (TOP),” had been manifest.

It was similarly noted that there had been “incidence of manual load dropping (MLD) despite oversupply of generating capacity in the region resulting from the DUs’ non-compliance to the IMDP.” MLD could result in service interruptions to some customer-segments.

The ERC pointed out that completion of the WESM registry for Mindanao spot market trading participants as well as their participation – primarily of the purchaser distribution utilities, will be “essential to the forthcoming commercial operations date of the WESM in Mindanao.”

The ERC qualified these requirements “are imperative in ensuring the market preparedness with the spot market environment.”

The electricity spot market in Mindanao was launched as early as June 26, 2017; and that should have reached commercial operations since last year – but several factors contributed to the delays in processes toward its prepping up to COD.

Luzon and Visayas grids already have their spot markets – and these have been serving as alternative market to power capacities that are not covered by contracts; and this is also a procurement option for DUs that had not fully covered their supply portfolio with power supply agreements.