All Mindanao utilities to join WESM; Jan. start targeted

By Carmelito Q. Francisco – November 14, 2019 | 10:01 pm
from Business World

power line electricity energy


DAVAO CITY — All power distribution utilities (DU) in Mindanao, both electric cooperatives and private companies, have applied to participate in the wholesale electricity spot market (WESM), which is targeted to start commercial operations on Jan. 26.

Eric Niño U. Louis, corporate communications manager of the Independent Electricity Market Operator of the Philippines, Inc. (IEMOP), said it is now waiting for the DUs to complete all the requirements, particularly the prudential deposit.

The size of the prudential deposit will depend on consumption for DUs and capacity for generators, along with the projected volume that will be drawn and sold in the market.

There are 28 electric cooperatives and four privately-owned distribution utilities in the southern islands, based on government data.

IEMOP is also awaiting approval from the Energy Regulatory Commission for its pricing cap mechanism, Mr. Louis said during a round table discussion Tuesday.

The seven major generating companies, including the government-run Power Sector Assets and Liabilities Management (PSALM) that operates the Agus and Pulangi hydropowerplants, have completed their applications, he added.

Philippine Electricity Market Corp. (PEMC) Chief Governance Officer Rauf A. Tan, meanwhile, said the system has been undergoing test runs over the last two years and the company is confident that it is ready for commercial operations.

“(The percentage of participation in the trial operations) is a little bit low; nonetheless, that percentage of participation is not a major factor because it is supposed to just test the system if it works,” Mr. Tan said.

The PEMC, the former market operator which now functions as the WESM governance and regulatory body, and IEMOP have been doing road shows in Mindanao, which include practice sessions to help WESM participants familiarize themselves with the wholesale market process.

Robinson P. Descanzo, IEMOP chief operating officer and trading head, said one of the main benefits of the WESM is that DUs that have contracted supply that exceeds their requirements will have a mechanism to resell their surplus.

Mindanao currently has a capacity of about 3,300 megawatts (MW) and an average requirement of about 2,300 MW, leaving an excess supply that will be available at WESM.

The P52-billion Mindanao-Visayas grid connector project is also targeted for completion by 2020, which would give Mindanao suppliers access to the nationwide system.