WESM shelves Visayas launch

The Wholesale Electricity Spot Market (WESM) in the Visayas recently announced that there will be delays on the planned commercial opening slated this month, to allow further time for participants to complete registration and test their market trading interface systems.

WESM’s operator, the Philippine Electricity Market Corporation (PEMC) initially targeted the 26th of January 2008 as the Visayas WESM Commercial Operations launch date.

However, after deliberations were held by the PEMC Board during its meeting early this week, a decision was reached to delay Visayas Commercial Operations and extend the run of the Live Dispatch Operation (LDO).

“Once we have completed the LDO, the PEM Board will reconvene and deliberate on the LDO results before it submits its recommendation to the Department of Energy which needs to give its final approval for full commercial operations in the Visayas,” said PEMC President Lasse A. Holopainen.

The implementation of the LDO, which will run for at least two weeks, is intended to determine the readiness of the market participants and their respective systems to operate in a commercial environment. 

All energy in the Visayas will be scheduled through the market during this time.  However, there will be no financial settlement.

“All systems which have been put into place during the Visayas TOP are being utilized in the LDO to familiarize the participants and would-be customers with procedures associated with Commercial Operations," said PEMC executive vice president Mario R. Pangilinan.

WESM began commercial operations in Luzon in June 2006 and has since contributed changes to the industry. One such significant change was the increase in the privatization program of generation capacities with over P119 billion worth of generation assets privatized since the market started.

"The presence of WESM is encouraging investors to invest in the Philippine Power Sector.  Operation of the Market in the Visayas will ensure the efficient pricing of electricity as well as the security of long-term power supply," Holopainen added.

The establishment of WESM is expected to create a more robust energy industry by encouraging competition and efficiency among industry players. 

The Electric Power Industry Reform Act (EPIRA) of 2001 mandated the establishment of the electricity spot market to set the price of electricity thru market forces, free from the restrictions of regulation. 

Transparency in market operations transactions ensure the reflection of the true cost of electricity and improve the delivery of power supply to the end-users.

If WESM will start its commercial operation, it allows buyers and suppliers to trade electricity as a commodity will invite interested power facility investors to open plants, where is it needed, as the electricity spot market will show the real demand and supply of power.

However, electricity consumers will not feel the impact of the spot market in the short term, as 97 percent of the 1,065-mega-watt average peak demand in the Cebu-Negros-Panay grid is covered by bilateral contracts.