PEMC to start Visayas power trading by September

MANILA, Philippines – Philippine Electricity Market Corp. (PEMC), the operator of the country’s wholesale electricity spot market (WESM), is targeting to start trading in the Visayas on September.

 “We are now on trial operation,” PEMC president Melinda Ocampo said, noting they are on track on the scheduled operation of WESM Visayas.

But Ocampo pointed out that WESM Visayas would not yet link with the Luzon-based platform.

“We would try for the meantime to have a WESM Visayas on a stand-alone basis. We will decide after the trial operation if we need to link it,” she said.

WESM Visayas is expected to help alleviate the power supply shortage in the area.

The Department of Energy earlier said it would be better to directly establish WESM Visayas than go through a so-called Visayas Supply Augmentation Auction (VSAA).

The VSAA hopes to address the growing concern of tight power supply in the Visayas, specifically in the progressive island of Cebu, Negros and Panay.

VSAA is a voluntary program which allows distribution utilities and large consumers of electricity to boost their supply deficit through a transparent and competitive means similar to the electricity spot market in Luzon.

The program offers distribution utilities a number of options for the procurement of power. These include purchase of supply deficit from another supplier through the VSAA, apart from their existing bilateral contracts, as well as voluntary load curtailment.

The successful launch of the VSAA is envisioned to allow for a smooth transition to the operation of the Visayas commercial operations program of the WESM which is expected to encourage possible investors to venture in the Visayas power industry, thus bringing in competition necessary for the region.

WESM began commercial operations in Luzon in June 2006. It is a centralized venue for buyers and sellers to trade electricity as a commodity where its prices is based on actual use (demand) and availability (supply).

WESM was created by Republic Act 9136, the Electric Power Industry Reform Act (EPIRA) of 2001, to provide for the establishment of an electricity market that reflects the actual cost of electricity and lowers its price through more efficient production through competition.