ERC okays P30.6-million WESM budget for Mindanao in 2017

By Lenie Lectura – October 3, 2017

from Business Mirror

THE Energy Regulatory Commission (ERC) has approved a preoperating budget of P30.6 million for the Wholesale Electricity Spot Market (WESM) in Mindanao for 2017.

The budget approved for the Philippine Electricity Market Corp. (PEMC) is lower than the proposed P32.23 million. PEMC is a nonstock, nonprofit corporation that also operates the Luzon and the Visayas WESMs.

The ERC said a facility for the full operation of WESM Mindanao is necessary and putting up such a facility will entail expenses.

“In view of the forthcoming WESM operations in Mindanao, the commission, upon initial evaluation of the instant application, deemed it appropriate to partially approve the application as far as the budget for WESM Mindanao is concerned,” the ERC’s 13-page order stated.

The bulk of the approved budget, which is over P17 million, goes to maintenance and other operating expenses. The remaining P13.5 million is allotted for capital expenditures.

The ERC said the preoperating expenses to be incurred in the operation of WESM Mindanao should not be charged to the Luzon and the Visayas customers.

“The separate apportionment of expenses between Luzon-Visayas WESM and Mindanao WESM is significant, considering that in the absence of interconnection by the Mindanao grid, WESM Mindanao will be a market separate from the Luzon and the Visayas WESM,” the ERC said.

WESM in Mindanao was launched on June 28. The Electric Power Industry Reform Act of 2001 mandated the Department of Energy  to establish WESM as a venue for trading electricity as a commodity.

WESM started commercial operations in the Luzon grid in June 2006 and in December 2010 in the Visayas grid. The intricacies of the Mindanao power industry delayed the establishment of WESM Mindanao.

“WESM Mindanao will enable a transparent and fair mechanism to bring in more competition, more investors and a sustainable business climate that will eventually redound to empowering consumers from Mindanao of their power of choice,” Energy Secretary Alfonso G. Cusi said.