Biz groups push electricity spot market

Various business groups are pushing for the initial operations of wholesale electricity spot market (WESM) in January 2006 to finally take one step forward to the realization of the restructuring of the power sector.

In a forum hosted by the Energy and Clean Air Project of the United States Agency for International Development (USAID), Philippine Chamber of Commerce and Industry (PCCI) energy committee chairman Jose S. Alejandro said the implementation of WESM would help alleviate the problem of the industry particularly the high electricity rates.

"It is clear that we have to do something so that we can solve the dilemma of the power industry and also our concerns on affordable electricity rates," Alejandro said.

PCCI’s view is shared by other foreign business groups including the European Chamber of Commerce of the Philippines (ECCP) and the Australia-New Zealand Joint Chamber of Commerce.

Speaking on behalf of ECCP, Union Fenosa’s Emilio Vicens has urged the industry players to join hands in ensuring that the country’s electricity spot market would be able to meet the requirements of the industry.

In the same forum, the groups said they expect WESM to be able to prove its worth within one year of operation.

Other players that expressed support to the operation of WESM next year include: Manila Electric Co. (Meralco); the Philippine Independent Power Producers Association (PIPPA); Private Electric Plant Operators Association (PEPOA) and among others.

At the same time, the industry stakeholders are urging the energy regulators to reconsider its proposal to change the WESM’s design. "The Energy Regulatory Commission (ERC) should stick to the bid-based pricing," they said.

According to the groups, the ERC should focus on approving the rules and guidelines that would facilitate the smooth implementation of the WESM such as the price determination methodology and market fees, among others.

Meanwhile, business groups also called for the market operator, Philippine Electricity Market Corp. (PEMC) to exert efforts in addressing various concerns of the industry which arose during the WESM trial operations conducted in Luzon and Visayas in the past months.

The issue on WESM operation is just one of the concerns raised during the forum. The other major concerns include the timetable for the implementation of the open access; the National Power Corp. (Napocor) privatization; and how to resolve the expensive power rates in the country.