Wholesale power spot market to start earlier than expected
The Philippine Star
06/16/2006
The operation of the wholesale electricity spot market (WESM) in Luzon will start earlier than expected with the approval of the Energy Regulatory Commission (ERC) of two crucial applications of the Philippine Electricity Market Corp. (PEMC), a top energy official said.
"The President indicated that since we are now ready, then we should go for June 23. We need not wait for a later date that was initially based on her schedule, which was around July 6 or thereabout," Energy Secretary Raphael P.M. Lotilla said.
Lotilla said the ERC has already approved PEMC’s applications for price determination and market fees.
"The ERC chairman informed us that they have approved all of the requirements necessary for the commercial operation of WESM, which include the price determination methodology, the administered price and the market fees," he said.
The energy chief noted that all other necessary items needed for the WESM operations are in place.
"In addition, the tripartite committee put up consisting of the ERC, WESM and PEMC to set the price cap was also already convened and they have agreed on the implementation of the price cap," he said.
Lotilla said it is high time for the country to operate the WESM to eventually lower the country’s electricity rates.
"We look forward to the WESM for a number of things, not only that it would be providing a transparent market mechanism for buying and selling power, but it also would enable us to determine the market price, which would be the basis for determining the universal charge for stranded cost - which would enable us to refinance over a longer period of time. Definitely the impact (on power rates) would be lower. We could not proceed with this because there was no market price," he said.
Earlier, the ERC also approved the application of the National Transmission Corp. (TransCo) as the interim WESM metering service provider.
As a prelude to the commercial operations of the WESM, the ERC needs to approve the following: price determination methodology (PDM); market fees to be charged to all WESM members; and the administered price cap.
The PDM shall reflect the accepted economic principles of how energy will be priced in the WESM and will provide a level playing field to all electric power industry participants.
Market fees, on one hand, are the costs of administering and operating the WESM which shall be recovered by the market operator through the charge to be imposed upon all market members.
The administered price will be imposed during market suspension and intervention to be used as basis for settlements. All three concerns need to be synchronized to ensure the effective and efficient operation of the WESM.
06/16/2006
The operation of the wholesale electricity spot market (WESM) in Luzon will start earlier than expected with the approval of the Energy Regulatory Commission (ERC) of two crucial applications of the Philippine Electricity Market Corp. (PEMC), a top energy official said.
"The President indicated that since we are now ready, then we should go for June 23. We need not wait for a later date that was initially based on her schedule, which was around July 6 or thereabout," Energy Secretary Raphael P.M. Lotilla said.
Lotilla said the ERC has already approved PEMC’s applications for price determination and market fees.
"The ERC chairman informed us that they have approved all of the requirements necessary for the commercial operation of WESM, which include the price determination methodology, the administered price and the market fees," he said.
The energy chief noted that all other necessary items needed for the WESM operations are in place.
"In addition, the tripartite committee put up consisting of the ERC, WESM and PEMC to set the price cap was also already convened and they have agreed on the implementation of the price cap," he said.
Lotilla said it is high time for the country to operate the WESM to eventually lower the country’s electricity rates.
"We look forward to the WESM for a number of things, not only that it would be providing a transparent market mechanism for buying and selling power, but it also would enable us to determine the market price, which would be the basis for determining the universal charge for stranded cost - which would enable us to refinance over a longer period of time. Definitely the impact (on power rates) would be lower. We could not proceed with this because there was no market price," he said.
Earlier, the ERC also approved the application of the National Transmission Corp. (TransCo) as the interim WESM metering service provider.
As a prelude to the commercial operations of the WESM, the ERC needs to approve the following: price determination methodology (PDM); market fees to be charged to all WESM members; and the administered price cap.
The PDM shall reflect the accepted economic principles of how energy will be priced in the WESM and will provide a level playing field to all electric power industry participants.
Market fees, on one hand, are the costs of administering and operating the WESM which shall be recovered by the market operator through the charge to be imposed upon all market members.
The administered price will be imposed during market suspension and intervention to be used as basis for settlements. All three concerns need to be synchronized to ensure the effective and efficient operation of the WESM.
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