Visayas electricity spot market to start by mid-year

By JADE LOPEZ, Reporter

THE commercial operations of the Wholesale Electricity Spot Market (WESM) in the Visayas region is expected to begin by May or June this year, an energy department official said.

Department of Energy (DoE) Undersecretary Melinda Ocampo said the much anticipated WESM-Visayas operations will soon follow after the implementation of the Visayas Supply Augmentation Program (VSAP).
“We are hoping WESM will go live in the Visayas by the end of the first semester,” Ocampo said in an interview recently.

She said DoE, together with the WESM operator Philippine Electricity Market Corp. (PEMC), is still awaiting for the approval of the VSAP from the Energy Regulatory Board (ERC).

The opening of WESM-Visayas is one of the most anticipated developments in Cebu, especially for the private sector as this is expected to resolve the looming power shortage in the region.

Last year, 16 business chambers from all over the Visayas, agreed to call the attention of President Gloria Macapagal-Arroyo’s government to give a go signal for the commercial operation of WESM-Visayas.

The business sector in the region highlighted its concern on the region’s power crisis and urged the DoE to take immediate action on the matter.

“WESM will help dictate the true cost of electricity in the market. It will create a more dynamic energy industry by encouraging competition and efficiency among industry players,” said Carlos Co, chairman of the Cebu Power Core Group of the Cebu Chamber of Commerce and Industry.

Co, in a separate interview, said Cebu’s business sector is expecting WESM-Visayas to run its commercial operation this year, as it already had its dry-run for over a year now.

He said the decision to implement the VSAP is a good indication that the market can participate in the spot market, once it is commercially opened.

The Electric Power Industry Reform Act (EPIRA) of 2001 mandated the establishment of the electricity spot market to set the price of electricity thru market forces, free from the restrictions of regulation.

Transparency in market operations transactions ensure the reflection of the true cost of electricity and improve the delivery of power supply to the end-users.

If WESM will start its commercial operation here, it allows buyers and suppliers to trade electricity as a commodity will invite interested power facility investors to open plants, where it is needed, as the electricity spot market will show the real demand and supply of power.

However, PEMC earlier emphasized that the commercial operation of the WESM is expected to have minimal impact on the end-users in the Cebu-Negros-Panay grid, because 97 percent of the 1,065-mega-watt average peak demand is covered by bilateral contracts between generators and distribution utilities.

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