DOE expects WESM Mindanao opening to be delayed

MANILA, Philippines — The Department of Energy (DOE) expects a delay in the start of full operations of the Wholesale Electricity Spot Market (WESM) in Mindanao due to pending rules in pricing.

DOE assistant secretary Redentor Delola said the Energy Regulatory Commission (ERC) has yet to approve the price determination methodology (PDM) for pricing and settlement of electricity transactions in the Mindanao grid.

‘We won’t be able to go live. We don’t have the approval of the PDM yet,” he said.

WESM Mindanao was supposed to start operating on Jan. 26, alongside the operations of New Market Management System (NMMS) in Luzon and Visayas.

On the new commercial date of WESM Mindanao, Delola said the DOE would issue a statement on the deferral of the commercial operations of NMMS for Luzon, Visayas and Mindanao.

The DOE earlier asked the ERC to relax its requirements to join Mindanao’s WESM to be able to meet commercial operations target.

This as the power regulator ordered all power distributors and industry participants in Mindanao to comply with all the requirements to ensure the overall readiness of the systems and procedures towards the shift to a new system and environment. 

ERC chairperson and chief executive officer Agnes Devanadera said registration of the WESM had already been delayed based on results of the recent 19th WESM Mindanao Readiness Assessment (WMRA) meetings conducted by the DOE.

The WMRA further noted the low turnout of participation in the trial operations program and the incidence of manual load dropping despite oversupply of generating capacity in the region resulting from the DUs’ non-compliance to the IMDP.

ERC sad the completion of the WESM registry for Mindanao trading participants and their active participation – particularly of DUs – are essential to the commercial operations of WESM in Mindanao, which has already been pushed back a couple of times.

The WESM in the Mindanao grid was launched on June 26, 2017 pursuant to DOE circular 2017-05-009 which aimed to provide sufficient time for the market operator, system operator and WESM participants to prepare and familiarize themselves with WESM operations.  

Established under the Electric Power Industry Reform Act of 2001, WESM serves as the country’s electricity trading market.

Mindanao was not part of the WESM and its power grid is not connected to the national grid.

Instead, an Interim Mindanao Electricity Market was set up on Sept. 26, 2013 and started full commercial operations on Nov. 26, 2013 as a trading floor for electricity in the region.

However, this was suspended in February 2014 following a grid-wide power interruption in the region, preventing power companies with excess generating capacity to offer their output to distribution utilities.