Rules on electricity spot market out

The Philippines will soon be the first country in Asia to establish and operate a wholesale electricity spot market (WESM), Energy Secretary Vincent S. Perez said on Friday.

The DOE promulgated on Friday the rules and regulations governing the establishment and operation of the WESM.

"We are pleased to announce that after one year of hard work, we have already completed the drafting of the WESM rules. These rules that we are promulgating today is a product of a series of consultations with all stakeholders, noting and acknowledging their respective opinions in a bid to create an integrated and fully functioning spot market responsive to the demands of all sectors involved," Perez said.

The creation of the WESM is provided for under the provisions of the Electric Power Industry Reform Act of 2001 or Republic Act 9136. The signatories to the promulgated WESM rules include power giants: Manila Electric Co. (Meralco), National Power Corp. (Napocor), the Philippine Rural Electric Cooperatives Association (Philreca), Philippine Independent Power Producers Association (PIPPA) and the Philippine Electric Power Plant Owners Association (PEPOA).

Under a deregulated environment, electricity will be traded electronically on a hourly basis. Its operation is likened to the stock market or a local market where buyers and sellers meet.

The operation of the WESM is expected to start before the end of the year. To date, the formal awarding of the interim market management system (IMMS), the software for the WESM operations, to winning bidders Alstrom Phils. Inc., is awaiting the evaluation of the World Bank, which is the funding agency for the project.

After the signing of the WESM rules, an autonomous group that will be constituted by the DOE will manage the market for a period of one year.