French firm warns RP of California-type power crisis

French power giant Alstom has warned the government of a California-type power crisis if it skips the interim phase and decides instead to go straight to the implementation of the wholesale electricity spot market (WESM).

"It is always good for a system and its rules to be tested first before going through full implementation," Alstom Philippines country president Gilles David told reporters yesterday.

David said "it is dangerous if the system will not go through proper verification. It might lead to a California incidence. It is not politically right for the Department of Energy (DOE) not to test first the system," he said.

Though David admitted that the DOE has yet to decide whether to scrap the interim arrangement for WESM, he said there are some officials from the National Transmission Co. (Transco) who are proposing to discard the testing period for WESM.

"The DOE has not yet decided on that," he said, noting that the decision to re-bid the WESM system will delay the process by about four to five years.

David said Alstom is, at present, helping the DOE look for alternative financing which was the major cause of the delay in the establishment of the WESM.

The Alstom executive said there are a number of financial institutions which have indicated keen interest to help the DOE in funding the WESM.

He said Citibank N.A. and Credit Lyonnais have submitted proposals to provide financing from the interim WESM.

Alstom was declared the winning bidder that will provide the interim market management system (IMMS) for WESM which was questioned by the World Bank, the institution that was supposed to provide for the $7-million cost of the project.

The WB wants the government to re-bid the IMMS which will take a long process.

With this, the government decided to tap alternative financing such as that of the Asian Development Bank (ADB) which agreed to provide some $30 million.

But it was learned that the ADB wants the government to proceed directly with the implementation of full WESM instead of passing through the testing page.

Despite this, David said they are not discouraged by the issues surrounding the WESM establishment. "I hope the DOE will not jump into this decision of not going through the interim. The government will have difficult time if they will not pass through the interim stage. They could always bid for the full WESM while undergoing the test period," he said.

He said they would bid for the full WESM system if the government wants to. "We have very good experience with regard to providing such system. We will not give up," he said.