Traders hope WESM-Visayas finally operates

CEBU, Philippines - Now with a Cebuano at the helm of the Department of Energy (DOE) in the person of Jose Rene Almendras, the business sector in the Visayas hopes that the long been awaited commercial operations of the Wholesale Electricity Spot Market (WESM) will finally push through.Members of the business chambers in the Visayas stressed the immediate need for the WESM to finally operate here, in fact a facility intended for WESM at the Asiatown IT Park has already been idle for the past two years.           

Philippine Chamber of Commerce and Industry (PCCI-Visayas) vice president Francis O. Monera said that the business sector in the region hopes that the new administration will see the need to fix and enhance the power supply that already affected majority of businesses in the Visayas.

The stalled commercial operations of WESM-Visayas has been one of the hottest issues tackled during the recently concluded Visayas Area Business Conference held in Cebu, which was attended by over 200 business leaders in the Visayas.

In an earlier interview with DOE undersecretary Mary Rose Magsaysay-Crisostomo, she said that measures are now being put in place in order to make the WESM-Visayas finally operational.

“We are speeding up the process, we are dove-tailing some measures [to make it commercially work],” said Crisostomo in an interview.

She said the reason behind the delay of WESM-Visayas is that the Philippine Electricity Market Corporation (PEMC) and DOE are still making the appropriate adjustments to match the electricity supply and demand within the Visayas grid.

Crisostomo earlier vowed that immediately after the election, DOE will fast track the implementation of the WESM-Visayas and will go online immediately.

While WESM-Visayas was still under scrutiny, DOE implemented the Visayas Supply Augmentation Auction (VSSA) towards the latter part of 2009.

“If we have to operate the WESM, we need a new software that is much more expensive, and the public may not be prepared for that,” said DOE undersecretary Roy V. Kyamko.

Although the WESM-Visayas had been set up already pending the go signal of DOE for commercial operation, Kyamko said there are still a lot of software and technology adjustments that have to be made, in order to “finally” operate the WESM here.

“We can’t copy the software in WESM-Luzon. Here, there are more technology and software needed,” Kyamko said explaining the reason why Visayas need the VSSA, instead of the WESM operation.

On the other hand, the private sector had been asking the DOE and other concerned agencies to push WESM instead of the VSAA, as these two facilities have (more or less) the same function.

The VSAA was introduced after the WESM failed to commercially operate on schedule following a study result which said that it is not yet feasible to operate the spot market here, since there is no excess in electricity.

“Why go to VSAA, when we have WESM here ready for operation,” said Cebu Chamber of Commerce and Industry (CCCI) power core group chairman Carlos Co.

WESM operator PEMC had said it was ready to operate the market. WESM Visayas has been on trial operations since 2005.

East Asia Utilities general manager Roger Lim said that Cebu could have avoided the power shortage problem if the Cebu-Negros-Panay Grid capacity is being maximized, and the WESM-Visayas had been allowed to commercially operate.

DoE has deferred WESM operations in the Visayas due to inadequate capacity in both power generation and transmission facilities, as revealed in a study conducted by consultancy firm Intelligent Energy Systems (IES).

The establishment of WESM is expected to create a more robust energy industry by encouraging competition and efficiency among industry players.

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.