By Myrna M. Velasco
The commercial operations of the Wholesale Electricity Spot Market (WESM) in Mindanao will be pushed to first half of next year, according to the Department of Energy (DOE) and the Independent Electricity Market Operator of the Philippines.
Energy Assistant Secretary Redentor Delola said “we are hopeful that the preparations will be completed by first semester of 2019,” adding that such process shall already include the approval of the Energy Regulatory Commission (ERC) of the spot market’s price determination methodology (PDM).
The energy official noted that the WESM in Mindanao has been helping entice power investments in the grid – especially for capacity additions that will meet demand growth between now until 2025.
The department, he added, has been closely coordinating with relevant industry stakeholders – primarily the market operator and the National Grid Corporation of the Philippines (NGCP), on matters like registration of participants; capacity building; and installation of monitoring, communication and other interfaces necessary for a seamless trading in the market.
For the Luzon and Visayas spot markets, WESM is entering its new life cycle as its commercial operations now roll under independent market operator IEMOP. On the strength of an Operating Agreement, the newly minted market operator was formally carved out last September 26 from the restructured Philippine Electricity Market Corporation (PEMC), which has also taken on a new role to become the spot market’s governing body.
According to IEMOP President Francis Saturnino C. Juan, their existence and service as a fresh entity will “usher in the electricity market’s inevitable transformation to a more competitive state for the ultimate benefit of the electricity consumers.”
It has been a more-than-a-decade stream of transformation, and now that the independent market operator is finally taking the reigns of the WESM, consumers and market participants alike have been aiming for further improvements — not just in WESM’s processes but in the long-aspired for reduction in electricity rates.
As Juan noted, “the IEMOP fulfills the promise of EPIRA to foster competition in the WESM through an independent market operator.”
Core of the spot market operator’s functions shall include facilitating the registration and participation of generating companies; distribution utilities; directly connected customers or bulk users; suppliers and contestable customers in the WESM – or those in the retail competition and open access (RCOA) regime of competitive phase in the market.
The WESM likewise establishes the hourly schedules of generating units that will supply electricity to the grid – and shall also process the corresponding traded prices via the market management system (MMS) or the IT-enabled platform of the spot market.
Further, the market operator will manage the metering, billing, settlement and collection of spot trading amounts corresponding to the service it must deliver to market participants.
The WESM is also heading into its transformative phase of having a new market management system (NMMS), of which trial phase is still being perfected according to the expected functionalities of the market and its participants.
In carrying out its mandate as spot market operator, IEMOP noted that it is “bound to strictly comply” with the Electric Power Industry Reform Act (EPIRA) and its implementing rules and regulations, the WESM Rules as well as the other related issuances of the Department of Energy.