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Thursday, June 24, 2021

WESM to affect electricity bill

CONSUMERS can expect changes in their electricity bills once the Wholesale Electricity Spot Market (WESM) is implemented in Mindanao, Philippine Electricity Market Corporation (PEMC) said.

“The generation charge will be the only component of the bill that will be affected by WESM. Now the changes in the generation charge will depend on the behavior of your electric cooperative or your distribution utilities,” said PEMC president Melinda Ocampo during the press briefing on Mindanao WESM at Pidoks, Davao City, Tuesday, February 21.

The generation charge, which is the cost of power generated and sold to the distribution utility, is among the main components of the unbundled electric bill. It also accounts for around 50 percent of the total cost of a consumer's electricity bill.

According to PEMC, WESM is “where generators sell their excess capacities not covered by contracts and where the customers buy additional capacities on top of their contracts.” It was created by virtue of Section 30 of Republic Act (RA) 9136 or the Electric Power Reform Act of 2001.

To ensure that electricity rates remain affordable to the consumers, cheaper energy sources will be dispatched first once the WESM is implemented.

Based on the existing Mindanao grid dispatch protocol, electricity generated by the Agus-Pulangi hydropower plants will be dispatched first since the generation facility has the least generation cost among power plants in Mindanao. This will be followed by the 200 megawatts Steag Coal Fired Power Plant, geothermal, coal-fired power plants, and diesel-fired power plants. Meanwhile, power generated from renewable energy plants will be dispatched in accordance to the RA 9513, Renewable Energy Act of 2008.

However, Ocampo said the dispatch protocol can also be affected by other external factors.

“For example, during summer, when water levels at the hydropower plants are low, we may first dispatch the other sources,” she said.

Ocampo said to ensure the price offers by generators will not go out of control, generators can offer only up to P32 per kilowatt hour and as low as P10 per kilowatt hour.

She said in the event that generation companies experience excess in power, they are more likely to sell it at a much lower price to be able to dispatch it immediately.

For his part, Mindanao Development Authority assistant secretary Romeo Montenegro said the impact on the consumer's bill will also depend on the market's mix to a certain power distribution utility or electric cooperative power supply mix.

“If the electric cooperative has no bilateral contract and all its capacity is being sourced from the market, then suddenly there is an increase in the prices of electricity in the market, then during that period their power rates are high,” Montenegro said.

The WESM is expected to start its trial operations in Mindanao on March this year and targeted to be fully deployed by June this year. (With Reuel John F. Lumawag)
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