Business World
BY MARITES S. VILLAMOR, Cebu Bureau Chief
CEBU CITY -- Final simulations are being staged by Philippine Electricity Market Corp. (PEMC) in preparation for the opening of the region’s power spot market on Sunday.
Power producers in the Visayas will make offers and customers such as distribution utilities and individual end-users will make demand bids under a live dispatch program. No settlements, however, will be made.
Regino H. Galindez, PEMC training and promotions unit head, said live dispatch operations would continue even during the Christmas holidays until the Visayas Wholesale Electricity Spot Market (WESM) opens on December 26.
The WESM allows power producers and consumers to trade uncontracted electricity as a commodity. When the Visayas market opens, there will initially be 256 megawatts (MW) of uncontracted capacity on the trading floor, PEMC President Melinda L. Ocampo said.
This should cover the supply deficit in the Visayas grid. National Grid Corp. of the Philippines yesterday said the region was short by 166 MW given a projected peak load of 1,348 MW and just 1,182 MW in available capacity.
Visayas WESM operations should have started two years after the Luzon market opened in 2006. Lack of generating capacity, which could lead to price spikes, has been blamed for the delay.
Rotating power outages have gripped Cebu, Negros and Panay since the summer of 2009 because of insufficient supply. The completion of new power plants with total capacity of about 500 MW is expected to address the shortage and stabilize the supply situation next year.
Mr. Galindez said all generating units in the Visayas had registered as participants as of yesterday. Of the 28 electric cooperatives in the Visayas, only five have not signed up.
"They (the trading participants) are ready," he said.
Ms. Ocampo, for her part, said she did not expect problems from cooperatives, some of which have pushed for postponement of the WESM’s opening.
"[I] don’t think there will be any problems. The electric cooperatives were present during the soft launching [last Dec. 14] and so far, it is pushing through. If there is any apprehension, I don’t know any of it," she told BusinessWorld.
The concerns of electric cooperatives have been resolved, Mr. Galindez said.
"Their [supply] contracts with PSALM (Power Sector Assets and Liabilities Management Corp.) have been extended. That was their concern, but that has been resolved," he said.
Without a supply contract, an electric cooperative would have to source all its requirements from the spot market and be exposed to possible price spikes.
Energy Undersecretary Josefina Patricia M. Asirit, in a separate interview, said electric cooperatives had the option to avail of transition supply contracts terminated by other cooperatives.
"There are transition supply contracts of cooperatives that will expire on Dec. 25. What happens now is the contracts will be extended, but not in the same amount as given previously, because of changes in volume, but some cooperatives will no longer accept these contracts because they have now entered into their own bilateral contracts," Ms. Asirit said.
Addressing price spike fears, she gave assurances that mitigating measures were in place.
"There are approved measures [by the Energy Regulatory Commission] like price caps which will also happen in Visayas," Ms. Asirit said.
The five cooperatives that have not registered are based in Eastern Visayas and were unable to send representatives for training in Cebu. Mr. Galindez said they might bring the training program to the region. -- with a report from Emilia Narni J. David
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