RDC-7 execom recommends suspension of WESM operation

CEBU, Philippines - The Regional Development Council executive committee has recommended the suspension of the operation of the Wholesale Electricity Spot Market (WESM) in the Visayas for allegedly being responsible in the perennial increase of the electricity rate in the region.

The council, upon the motion of Bohol Governor Edgar Chatto, also agreed to request Congress to conduct “immediate investigation” on WESM’s rate hikes. It likewise asked for the suspension of the collection of the rate hike pending investigation.

WESM was created to facilitate a transparent and competitive electricity market purportedly to serve as an efficient venue for the trading of electricity to ensure that generation is balanced with the ever-changing demand for electricity. Its roles, among others, are to reduce costs, align prices and tariff with costs; and to end the inherently inefficient monopoly system for generating and selling electricity by providing consumers with the choice power and the power of choice.

But Chatto, in his presentation to the RDC, said that these benefits “have not been felt by the public; instead, prices of electricity continue to rise.”

“As observed by some, the power industry during the WESM implementation is not driven by the principle of economic and social justice but has been dictated by market rules, to a great extent, favor some stakeholders,” he further said.

Chatto was the one who raised this issue during the RDC regular meeting in Bohol last month.

The Bohol governor noted that since WESM was established the power consumers have been paying for the site specific loss adjustment (SSLA) and Line Rental, as part of the generation charge, which have “considerable increased during the past months.” 

The governor claimed, based on the statistics from Bohol Electric Cooperative I, WESM was considered as the “most expensive among its suppliers” with P13.398/kilowatt per hour, compared to other sources.

For Bohol Light Company, Inc., the increase of WESM price has also affected its billings to its consumers.

From May 26 to June 25 this year, its hourly price showed “significant increases” particularly during peak hours, he said.

He said that based on their interpretation, WESM’s computation on Line Rental is was exaggerated.

The RDC execom also appealed to the Energy Regulatory Commission to review the WESM rules particularly on the computation of Line Rental and SSLA.

“There should be a detailed presentation of WESM bill adjustments from power generators/suppliers, showing in particular how these adjustments have been generated,” the RDC execom concurred.

Petronilo Ilanan of the National Association of Electronic Consumers for Reform said he was “happy” with the outcome of the meeting, saying it is “high time” that the government should act on their problem, which has affected the consumers especially those living below the poverty line.

“We are questioning the generation rate, but that is not our only problem. We also have problem with the transmission rate and the distribution rates based on the definition of rates in the EPIRA, which is all about recovery. Because they have been recovering parts of their capital and this capital has been given interest so we must expect the lowering of rates and not the increasing of rates,” he said.

Cebu City Mayor Michael Rama, who chairs the RDC 7, blamed the national government for the problem which the “ordinary folk” are suffering from because of such “oppressive” and “confiscatory” power price.

“The government is really the problem,” he said.— (FREEMAN)