Napocor urges review of WESM trading rules

The National Power Corp. (Napocor) is urging the Philippine Electricity Market Corp. (PEMC), the operator of the wholesale electricity spot market (WESM), to review its rules on the mode of trading, a ranking Napocor official said.

“They should now revisit all the lessons learned from this whole WESM operations,” Napocor president Cyril del Callar said.

“Is it good to have a gross pool or is it better to have net pool. I mean, revisit the rules PEMC should study the option that instead of having a gross pool, can we go on a net pool?”

He explained that a net pool represents the net of all contracts. “So what you trade, what you buy or what you offer to sell will be only your uncontracted requirement,” he added.

The Napocor chief said there is a need to look at this specific rule to avoid the incidence of alleged price manipulations in the market, adding that the net pool scheme may correct the demand-supply imbalance.

“It will really depend on the demand. For instance, if there will be a lot of OFWs that will come home in the last quarter of the year, then (power) demand could be expected to rise –in Visayas and Mindanao –where the peak will come by November,” he said.

“Unlike in Luzon, the peak is now. As all our exporters are running their plants to meet the December demand. Come December, power demand will drop, hence power demand in the Visayas and Mindanao will rise. And we’re seeing that cycle so far. But here in Luzon, this is the time to produce, manufacture, to meet your orders for December,” he said.

At present, the Electric Power Industry Reform Act (EPIRA) mandates market players in WESM to trade at least 10 to 15 percent of their contracted requirement.