PEMC offers alternatives for electric cooperatives

CEBU, Philippines – The Philippine Electricity Market Corporation (PEMC) assured electric cooperatives of protection and offered alternative solutions to encourage them to participate in the Wholesale Electricity Spot Market.

PEMC head for corporate planning and communications Mario R. Pangilinan met recently with electric cooperatives in the Visayas to discuss win-win solutions under the WESM system.

Department of Energy (DOE) secretary Jose Rene Almendras said that since the bilateral agreement with the electric cooperatives with the bulk power producers is one of the major issues that keep the electric distribution companies and cooperatives to participate in the WESM, this issue has to be given utmost solution.

According to Almendras, DOE through the PEMC will offer a transition supply structure that will protect electric cooperatives under open electricity market environment.

With this, PEMC and electric cooperatives in the Visayas will work together to come up with alternative solutions, in order for WESM to finally be implemented in the Visayas.

Pangilinan said that WESM-Visayas is presently on trial operation. Live dispatch together with the participants will follow after the trial operation.

However, Pangilinan emphasized that the commercial operation of WESM, which has been the clamor of the private sector in order to aid the power shortage problem in the region, could not be implemented if participants will not reach up to 50 percent of the total electric cooperatives operating in the region.

Hopefully, through the win-win solution electric cooperatives will be able to register with the WESM, so that commercial operation will be implemented before the end of this year, Almendras said.

In an earlier interview with Visayan Electric Company (VECO) chief operating officer (COO) Jimmy Aboitiz, he said that as long as there is no excess power to be traded, WESM will not make an impact.

VECO, the largest electricity consumer in the Visayas, gets 100 percent of its power requirement from bilateral agreements with bulk power suppliers, like the National Power Corporation (NPC), and others.

According to Aboitiz, if WESM will be opened for commercial operation, there is a possibility that it can not play with the market, because of its supply agreement with power generation companies.

WESM allows buyers and suppliers to trade electricity as a commodity that will invite interested power facility investors to open plants, where is it needed, as the electricity spot market will show the real demand and supply of power.

Electricity consumers on the other hand, will not feel the impact of the spot market in the short term, as 97 percent of the 1,065-mega-watt average peak demand in the Cebu-Negros-Panay grid is covered by bilateral contracts.

The WESM was created by Republic Act (R.A) 9136 or the Electric Power Industry Reform Act (EPIRA). This provided for the establishment of an electricity market that re-flects the actual cost of electricity and lowers its price through more efficient production through competition. (FREEMAN)