DOE works to put up spot market

The Department of Energy (DOE) expressed optimism that it could establish the wholesale electricity spot market (WESM) before June 2002, Energy Secretary Vincent Perez said.

Perez met with the heads of the inter-agency committee drafting the implementing rules and regulation (IRRs) for Republic Act 9136 or Electric Power Industry Reform Act (EPIRA) last July 10 to discuss the details of the formation of the WESM.

During the meeting, the committee raised the issues of the market structure and design of the ESM. Specific details of the spot market mechanism, however, are yet to be finalized.

Sources said the government is still awaiting approval of an Asian Development Bank loan to provide financial assistance to the formation of WESM.

Of the total $533 million ADB loan, about $31 million will go to the power trading and pooling system and development, which is the non-infrastructure related project of ADB.

The ADB loan will be effective for the period 2001 up to 2004, if granted within this year.

The WESM will provide the mechanism for identifying and setting the price of actual variations from the quantities translated under contracts between sellers and purchasers of electricity.

Generators, distribution utilities, suppliers, bulk consumers/end-users and other Energy Regulatory Commission authorized entities shall become members of the market.

Section 30 of the Power Act mandates the DOE to establish the WESM where buyers and sellers can transact business based on a price driven by the market.

Under the law, it is prescribed that an autonomous group will function as the market operator whose members will be constituted by the DOE from the industry. Later on, an independent entity will assume the operation of WESM. – Donnabelle Gatdula