Monday, April 30, 2007 Power trading to be held in Cebu
THE Department of Energy (DOE) has finally given the Philippine Electricity Market Corp. (PEMC) the go-signal to implement the power market scheme in the Visayas.
PEMC-run Wholesale Electricity Spot Market, which works similarly with the stock market, is a centralized venue for buyers and sellers to trade electricity as a commodity, with prices based on the actual use and availability.
This is why WESM is actively inviting stakeholders in the region’s power industry to participate in its trial operations that will help them prepare for commercial operations, which according to DOE Secretary Raphael Lotilla is slated to begin this December.
The commercial operations in Luzon is scheduled to begin this June following the trial operations that started 10 months ago, said Regino Galindes, PEMC unit head for training and promotions.
While it initially expressed uncertainties to implement WESM in the Visayas due to the unsteady supply of electricity in the region and the controversial WESM price manipulation in October last year, PEMC president Lasse Holopainen believes the region “is now ready.”
“By law, everyone has to trade with WESM,” Holopainen told reporters during the WESM inauguration Friday at the Skyrise IT Building in Asiatown IT Park, Cebu City.
Operations
He said WESM’s trading partners, during its trial operations, included the National Power Corp. (Napocor), Power Sector Assets and Liabilities Management Corp., and Salcon Power Corp., among others.
Republic Act 9136 or the Electric Power Industry Reform Act provides for the establishment of an electricity market that reflects the actual cost of electricity and lowers its price through a more efficient production through competition.
Holopainen said WESM not only gives consumers competitive electricity prices, but, more importantly, allows transparency and accurate information on electricity costs.
Galindes said because WESM provides real-time pricing information, it facilitates fair competition.
Demand
“All electricity produced is pooled and matched with the hourly customer demand. The website, where the end-users can access the prices, are updated daily so everyone knows what’s happening,” Galindes explained.
However, Holopainen said WESM still needs to iron out within the second quarter of the year technical issues, like the metering system down to the reliability of the energy management system data.
In a separate interview, John Ramon Aboitiz, chairman of Aboitiz Equity Ventures, of which the Aboitiz Power Corp. is a subsidiary, said that while the company welcomes WESM, it will primarily consider its existing contracts with Napocor and Cebu Private Power Corp. (CPPC), among others.
“If we lack power, then we can go with WESM but for now, we will first honor our contracts with them,” Aboitiz said.
Earlier, APC announced the company’s purchase of 50 million common shares from East Asia Utilities Corp. (EAUC), and 3.6 million common shares from CPPC, EAUC’s subsidiary.
Aboitiz said the buy-out is part of APC’s plan to expand its business in the power industry.
He, however, denied claims the company is trying to manipulate the industry.
“Under the Energy Regulatory Commission, we are allowed (to buy shares) but we cannot manipulate the industry since it is heavily regulated. If we increase the cost of power, consumers will normally look for other alternatives,” he explained.
Power, being a necessity, should be made affordable for all consumers, Aboitiz added. (MMM)
