Monday, March 19, 2007
Online marketplace to lower power price
AS PART of reforms introduced in the power industry to encourage competition and lower price, operation of the Wholesale Electricity Spot Market (WESM) in the Visayas will start in July.
An on-line market where power consumers and bidders meet and transact business, WESM started commercial operations in Luzon in June last year.
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It is managed by the Philippine Electricity Market Corp. (PEMC). Its basis is Section 30 of the Electric Power Industry Reform Act of 2001, which seeks to “demonopolize” the industry by allowing private investors and encouraging competition.
Josephine Cobilio, PEMC trainer, said they already went around the Visayas conducting a trial operations program, which simulates WESM trading so bidders would know how to strategize.
The process is roughly like the stock exchange. Trading participants submit energy offers 24 hours a day, seven days a week online.
With a pool of suppliers, the Market Operator (MO) matches offers of power generators, like the Visayan Electric Co. for example, with customers’ demand bids.
The MO then submits the resulting schedule to the System Operator, which runs the power system and actual dispatching.
Electricity used is measured using market clearing price and schedule.
Cobilio said consumers with at least one megawatt power consumption could participate by submitting demand bids.
But she admitted that WESM is subject to market forces, and electricity prices are highly volatile.
There will no longer be fixed prices, which in the National Power Corp.’s case is P3.3043 per kilowatt hour, with electricity subjected to the law of supply and demand.
End-users
“This is where suppliers and end-users strategize by submitting bids during off-peak hours, for example,” she said.
In the Visayas, off-peak hours start around 12 midnight until the morning. Demand slowly rises at 6 a.m.
Speaking from experience, Cobilio said the bill of her Makati apartment’s power consumption went down because of WESM.
However, she said, her bill went up when she started using her air-conditioning system at night, when power demand is high, and so is the price.
She said electricity spot markets are being implemented in other countries like New Zealand, Australia, United Kingdom and Canada.
But since the Philippines just adopted the strategy, “we have the most advanced spot system,” she said.
So far, the system has worked well since June last year, with trading suspended just once when typhoon Milenyo struck and toppled electrical poles and caused massive blackouts in Luzon, she said. (RHM)
For Bisaya stories from Cebu. Click here. (March 19, 2006 issue)
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