MANILA, Philippines - The Philippine Electricity Market Corp. (PEMC), the administrator of the Wholesale Electricity Spot Market (WESM), is seeking the approval of energy regulators for its P130-million system upgrade.
The business-to-business system development is in line with PEMC’s preparation for the start of the open access and retail competition (OARC) regime late this year.
Only the final decision of the Energy Regulatory Commission (ERC) is being awaited as public hearings have already been completed, said Julius Eleazar A. Bunyi, assistant manager for corporate planning and communications of PEMC.
The capital spending will be recovered through additional market fees.
“Since it is part of market fees, it will be passed on particularly on parts of the WESM,” Bunyi said.
As envisioned in the Electric Power Industry Reform Act (EPIRA) of 2001, OARC will introduce competition in the retail supply segment of the electric power industry.
Under open access, customers can freely choose their electricity service provider. This means that electricity end-users with an average monthly peak demand of one megawatt (MW) can choose from whom to procure their electricity service.
Through OARC, retail electricity suppliers can tailor their supply packages to provide customers with the best value based on their power consumption profile and other preferences.
Bunyi said the system development and enhancement will prepare PEMC for the open access that will start in the third quarter.
“We expect full-blown simulation and system trials at the latter half of the year,” Bunyi said.
Under EPIRA, the introduction of OARC will be gradual, starting first with end-users with a 12-month average demand of at least one MW. The coverage shall be expanded after two years to customers with a 750-kilowatt individual or aggregated demand.
PEMC expects 800 participants in the OARC, higher than the existing 200 participants in the WESM. Participants are composed of distribution utilities, retail electricity suppliers, central registration body and regulators like the Department of Energy (DOE), PEMC and ERC.
Last month, the DOE designated PEMC as the central registration body in the OARC. It will be in charge of reviewing WESM rules and manuals, coordinating with stakeholders and other government agencies and performing related functions for the effective implementation of OARC.
PEMC will be the settlement agent to handle the system for open access.
Bunyi said PEMC will also train OARC participants, conduct information dissemination and conduct readiness assessments as part of its preparation for the open access.
In November, ERC approved the deferment of OARC due to the lack of necessary infrastructure and policies. It was supposed to kick off on Dec. 26, 2011.