WESM operator recalls pricing application with ERC

Philippine Electricity Market Corp. (PEMC) has withdrawn its application with the Energy Regulatory Commission (ERC) for approval of the proposed procedures for the pricing and scheduling of electricity to be traded in the wholesale electricity spot market (WESM).

The ERC was supposed to start public hearings last Feb. 7 on the WESM price determination methodology (PDM).

PEMC president Lasse Holopainen, however, said the temporary withdrawal of the application would "prevent any procedural technicalities in the wake of the Supreme Court’s recent ruling on the Manila Electric Co. (Meralco) case."

Holopainen said PEMC, as the market operator of WESM, "wants to ensure that all its pricing activities and procedures are transparent and fair to all participants – the power generators, distributors, and buyers and that the PDM, once approved by the ERC, will not be open to being contested on procedural grounds."

"The Department of Energy DOE and industry participants have put in a lot of work to ensure that we remain on schedule, and the ERC has exerted great effort to ensure that appropriate hearing dates have been set for what would have been a first quarter launch of the WESM,"Holopainen added.

"The temporary withdrawal of our PDM application and its refiling will delay the start of WESM commercial operations by at least 60 days," he said. "It is a difficult decision to make but it is a prudent one. I would rather spend a few more weeks ensuring that everything is done correctly rather than expose our market participants to added risk."

Since the establishment of PEMC, the WESM project has not had a single delay. PA Consulting, an independent UK based firm issued a certification of the readiness of the WESM Market Management System (MMS).

In the meantime, and in order to minimize the possibility of further delay, the ERC has set hearings on the applications for approval of the WESM market fees and administered price determination methodology.

"While we will stand down from our commercial operations readiness, we will continue to work with the market participants to finalize preparations for the WESM commercial launch," PEMC head of market operations Mario Pangilinan said.