WESM takes backseat over VSAA

Instead of pushing the commercial operations of the Wholesale Electricity Spot Market (WESM) in the Visayas, the region still has to undergo a “dry run” first through the Visayas Supply Augmentation Auction (VSAA).

“If we have to operate the WESM, we need new software that is much more expensive, and the public may not be prepared for that,” said Department of Energy (DOE) undersecretary Roy V. Kyamko.

Although the WESM-Visayas had been set up already pending the go signal of DOE for commercial operation, Kyamko said there still a lot software and technology adjustments that have to made, in order to operate the WESM here.

“We can’t copy the software in WESM-Luzon. Here, there are more technology and software needed,” Kyamko said explaining the reason why Visayas need the VSAA, instead of the WESM operation.

On the other hand, the private sector had been asking the DOE and other concerned agencies to push WESM instead of the VSAA, as these two facilities have (more or less) the same function.

Furthermore, implementing the VSAA will need another investment, on top of the investment already made by the government to set up the WESM-Visayas facility here that had been idle in the last few years.

The VSAA was introduced after the WESM failed to commercially operate on schedule a study result which said that it is not yet feasible to operate the spot market here, since there is no excess in electricity.

“Why go to VSAA, when we have WESM here ready for operation,” said Cebu Chamber of Commerce and Industry (CCCI) power core group chairman Carlos Co.

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 much like the electricity spot market in Luzon.

Cebu Energy Development Corporation (CEDC) president Jess Alcordo earlier expressed disagreement on DOE’s reason that WESM is not yet applicable in Visayas, since there is no excess power, as over 90 percent is tied on bilateral contracts.

“Some government officials are hesitant to install WESM, believing that if WESM Visayas will operate the rates will increase, that is not true,” Alcordo said.

The introduction of VSAA, which works similarly as WESM, is pushed because “of lack of understanding” in the true benefits that is offered by the WESM, which created by Republic Act 9136, the Electric Power Industry Reform Act (EPIRA) of 2001.

If WESM were officially implemented here, the power supply deficit in Cebu is experiencing could have been rescued.

East Asia Utilities general manager Roger Lim said that Cebu could have avoided the power shortage problem if the Cebu-Negros-Panay Grid capacity is being maximized, and the WESM-Visayas had been allowed to commercially operate.

DoE has deferred WESM operations in the Visayas due to inadequate capacity in both power generation and transmission facilities, as revealed in a study conducted by consultancy firm Intelligent Energy Systems (IES).

WESM operator PEMC had said it was ready to operate the market. WESM Visayas which has been on trial operations since 2005.