DOE to hold IPPs accountable

by Myrna Velasco, Fabruary 22, 2015
from Manila Bulletin

The Department of Energy (DOE) is mandating revisions in the Wholesale Electricity Spot Market (WESM) Rules to properly delineate the responsibilities and accountabilities of specified industry players – primarily the independent power producers (IPPs).

It was emphasized that when there are market offenses or violation of market rules by the IPP plants being offered into the market by their independent power producer administrators (IPPAs), there is often “finger pointing” as to which entity shall be blamed for specific market breaches.

Energy Secretary Carlos Jericho L. Petilla has “directed the Electric Power Industry Management Bureau (EPIMB) to recommend policy that would solve the said issues involving the IPPAs, IPPs and the plant operators compliances in the WESM Rules.” Petilla’s move came after his agency issued the draft Circular on WESM rules revisions.

The department also stressed the need for an urgent DOE policy that will govern power plants with different operators and traders.

The energy department has been making reference to the fact that the capacity of the contracted plants are often traded in the market by the IPPAs, but the operation and control on dispatch typically lean on the IPPs.

With a revised policy, the DOE stressed that it could have a way “to stop or mitigate the continuing non-compliance in the WESM Rules.”

The department further noted, “It is necessary to amend the WESM Rules to provide clear and detailed responsibilities of each electric power industry participants that have either direct or indirect involvement in the trading and scheduling of electricity in the WESM.”

It was further explained that under the current IPPA arrangement, “the appointed IPPAs are responsible in offering the available capacity of the power plants with the corresponding offer prices in the WESM.”

Nevertheless, the department said “the actual operations of the power plants and implementation of dispatch schedules/instructions from the Market Operator/System Operator are performed by the IPPs.”

The DOE thus noted that “any non-compliance with the WESM Rules and Manuals results to finger-pointing between the IPPAs as the duly-registered TP (trading participant) and the IPP of the power plant having the entity responsible for the operations of the power plants and are not even registered in the WESM in any category.”

The department added such arrangement “is evident of uncertainties on who will be the entities which are accountable in cases of non-compliance or violation in the WESM Rules/Manuals.”


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