Mindanao power spot market set to start Fri

MANILA, Philippines - The much-touted Interim Mindanao Electricity Market (IMEM), a trading floor for electricity similar to the already established Wholesale Electricity Spot Market (WESM), is set to start operations on Friday.

This as Power Sector Assets and Liabilities Management Corp. (PSALM), the Department of Energy and the Philippine Electricity Market Corp. (PEMC), the operator of the IMEM, signed a partnership agreement to formally start the operations of the trading floor.

Energy Secretary Carlos Jericho Petilla led the official launch of the market in Davao City last week, gathering support for the initiative which is aimed at providing a short to medium-term solution to the power crunch in Mindanao.

During the launch, Petilla said the IMEM is among the measures the government is doing to help Mindanao consumers cope with the current power situation while waiting for new plants to come in.

“We’re doing a lot of different things. The IMEM is one,” he said.

Prior to the formal launch on Friday, PEMC already implemented trial operations since Aug. 26.

The establishment of the IMEM is embodied in a DOE circular released last January.

Based on the circular, PEMC will establish an interim electricity market in Mindanao specifically to address the supply deficiency in the island.

PSALM, which owns together with the National Power Corp. (Napocor) around 74 percent of the generation units in Mindanao, will have to “provide financial support on the operations and maintenance of the power plants operated by Napocor.”

The National Grid Corp. of the Philippines (NGCP), the country’s power transmission highway operator, for its part, created an IMEM database to upload and download generators’ and load customers’ capacity nomination data and schedules for the use of all players in the electricity market in Mindanao.

 â€œNGCP is also taking charge of installing the metering software and hardware to the market participants as they get ready for the IMEM,” said NGCP spokesperson Cynthia Alabanza.

The Energy Regulatory Commission (ERC), the power regulator, has already granted PEMC, the provisional authority to implement its pricing and cost recovery methodology.

The IMEM is designed to act as a day-ahead market where contracted capacities are traded. The day-ahead price is market driven and will be subject to an offer cap to be agreed by the regulator and ERC.

Registration in the IMEM is mandatory for all generation facilities, distribution utilities and all end-users in Mindanao.

The ERC-approved pricing methodology sets forth the specific principles and formula in determining the prices and settlement amounts for the IMEM.