DOE directed to suspend WESM Rules

by Myrna Velasco, February 8, 2015
from Manila Bulletin

Following final approval by the Senate of the emergency powers for President Aquino as invoked under Section 71 of the Electric Power Industry Reform Act (EPIRA), the Congressional Joint Resolution has directed the Department of Energy (DOE) to enforce suspension of specific Wholesale Electricity Spot Market (WESM) Rules so some power plants can optimize electricity generation during the critical summer months.

Some of the edicts have been intended to reinforce the effectiveness of the interruptible load program (ILP) as a primary contingency measure that will shore up supply during the so-called precarious periods.

The resolution as approved by the Senate last week has stipulated that the DOE is directed to “cause the temporary suspension of Clause 3.13.1 of WESM Rules and such other provisions to allow generation companies to re-declare bilateral contract quantities under the ILP up to five days after the trading day.”

Similarly, the energy department has been asked to “instruct the system operator (in this case the National Grid Corporation of the Philippines) to not utilize existing hydroelectric plants as must-run units under Clause3.8.2.1 (d) of the WESM Rules and WESM Manual on “Must Run” units and encourage hydroelectric plants to conserve water during off-peak hours from March 1, 2015 to July 31, 2015.”

By enabling the hydropower plants to conserve water use through the re-alignment of market rules, it was previously explained that their generation can be maximized at times when they are direly needed.

Nevertheless, it was set out that the Caliraya-Botocan-Kalayaan (CBK) pump storage plant units in Laguna province be declared as “must load units” (as pump) from 8:00 p.m. to 8:00 a.m. on Mondays through Saturdays and the whole of Sunday, if and when such shall be requested by the Power Sector Assets and Liabilities Management Corporation.

The CBK units may also be called upon as “must run units (as generator) during peak period hours to achieve the desired water elevation of the Caliraya Lake and optimize the existing output of the said units.”

The Congressional fiat additionally mandated the DOE to “issue the necessary policies and systems of incentives to allow private facilities with self-generation facilities (SGFs) an option to voluntarily connect and inject electric power to the grid or to the distribution utility (DU) system for contingency purposes.”

It was set forth that the ILP option has been preferred as solution when summer demand hits peak because it is relatively cheaper at P7.00 to P9.00 per kilowatt hour (kWh) compared to the P35 per kWh on the genset lease or procurement that was earlier proffered by the Executive Branch and the Department of Energy.

Part of the propounded contingency measures will also be for the DOE to “direct the NGCP and/or concerned DU to facilitate and expedite the connection and interconnection of existing committed projects and of plants for rehabilitation which will provide additional capacity.”

The mandates prescribed under the Joint Resolution for EPIRA’s Section 71 shall empower President Aquino to solve the country’s power supply crisis – which in the next months could teeter from system reserve lack or actual energy supply shortfalls depending on how the power plants could keep pace with high expectations of no forced outages.

 

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