Saturday, November 17, 2007 WESM to start operating in January
THE Wholesale Electricity Spot Market (WESM) set its commercial operations on Jan. 28, or after almost one year of trial operations.
A live dispatch operation will be conducted on Jan. 11 to 24 next year to test the submission of offers, processing of offers, demand forecasting, system status reporting, dispatch implementation and dispatch reporting.
WESM is run by the Philippine Electricity Market Corp. (PEMC), which works like a stock market for buyers and sellers to trade electricity as a commodity, with prices based on the actual use and availability.
In a press conference earlier this week, PEMC training and promotions unit head Regino Galindes said PEMC is expecting 19 power generators and 58 customers to participate in the commercial operations next year.
Of the 19 expected participants from the power generators sector, only 14 have registered while only 23 of the 58 targeted customers have enlisted.
Data from WESM’s Commercial Operation Plan registration status showed that the five generators include the National Power Corp. (NPC), Power Sector Assets and Liabilities Management, Global Business Power Corp., Philippine National Oil Corporation-Energy Development Company and the different independent power producers (IPPs).
Among the registered customers are the private distribution utilities, rural electric cooperatives and the industrial and commercial loads.
The cut-off date for registration is on Nov. 30 while the service provider readiness is targeted on Dec. 14.
Galindes said WESM will migrate the trading system, which is now used in Luzon, before Jan. 26 next year in preparation for the commercial operations.
The Visayas grid has a total generating capacity of about 1,500 megawatts (MW), about 80 percent of which come from the geothermal fields in Leyte.
PEMC president Lasse Holopainen said the Visayas may seem to have excess power but the dependable capacity this year was projected at only about 1,200 MW.
“The question is how to transfer this capacity across the islands,” he said.
Once commercial operations take place, PEMC anticipates opening up the “real” power supply and demand within the Cebu-Negros-Panay grid, thus, encouraging cheaper power rates in the long term.
“The commercial operations will invite interested power facility operators to open more plants, where it is needed, as WESM will show the real demand and supply of power,” Holopainen said.
Under Republic Act 9136 or the Electric Power Industry Reform Act (Epira), distribution utilities are required to get at least 10 percent of their supply from WESM.
Power generators are required to offer their entire power capacity but WESM will consider those that have already been contracted to different distribution utilities, Holopainen earlier said.
Holopainen, however, said WESM’s commercial operations on January will only show “less impact” to electricity consumers since 97 percent of the 1,065-MW average peak demand in the grid is covered by bilateral contracts.
Even with the operation of WESM, he said the bilateral contracts of the various power distributors with power generators “have to be respected.”
“The level of bilateral contracts in the Visayas is very high. Consumers are protected from the WESM price,” Holopainen said in an interview.
Distribution utilities, like the Visayan Electric Co., Cebu Electric Cooperative 1 and 2, have existing supply contracts with NPC and the IPPs.
These contracts are valid for several years yet, Holopainen said.
WESM has pegged the operational charge at only one centavo per kilowatt hour. (MMM)
