Maria Cristina Falls in Iligan City powers the Agus VI Hydroelectric Plant, one of the power supply providers of Mindanao.

Amid the sudden oversupply in power generation, a Wholesale Electricity Spot Market (WESM) is being planned for commercial operations in Mindanao in line with efforts to provide the region a fairer and a more competitive electricity market.

The Independent Electricity Market Operator of the Philippines (IEMOP), which took over WESM operations from the Philippine Electricity Market Corp. (PEMC) only last year, is planning to formally operate WESM in Mindanao by 26 January 2020.

WESM is the country’s trading floor for electricity where buyers and sellers trade electricity as a commodity, and prices are based on the actual demand and supply.

The plan was long overdue, having been put in trial by the PEMC in mid-2017 and was originally scheduled for commercial operations in June 2018. However, it never went fully operational due to the transition of control by IEMOP from PEMC.

In addition, some electric cooperatives in Mindanao have bucked the idea of a WESM amid the then deficient power supply. It prompted calls for more power plants and has since resulted in an oversupply.

“We are now ready. We are just making audits to make sure that once we operate, it is going to be smooth,” IEMOP president Jose Mari Bigornia said.

“For us (IEMOP), we are ready. But we cannot say that it’s a go because it will still be up to the DoE (Department of Energy).”

Under the original plan, WESM Mindanao will start with 85 trading participants comprising of 12 grid generation firms, 26 embedded generation firms, 28 electric cooperatives, four private distribution utilities, and 15 end-users.

WESM will also allow the region to dispose of its surplus to the national grid or buy if demand in electricity becomes higher.

In April, IEMOP conducted a Market Participants Update, which was meant to discuss participants on market outcome, system performance and recent developments, and also to create discourse on relevant policy and operational issues and concerns pervading the WESM.

In the Philippines, only Luzon and Visayas have been equipped with WESM, in June 2006 and December 2010, respectively.

Over the past few years, the Philippine Stock Exchange has been longing to merge WESM into its operations. In August this year, Department of Energy Secretary Alfonso Cusi said he was eyeing anew to shift WESM operations to PSE to make it truly independent.

“First, their operations should really be independent. IEMOP is a mere contractor of PEMC. If IEMOP fails in its performance, we can give it to others. We can give it to PSE,” Cusi said.

The PSE has long planned to take over operations of WESM as part of its efforts to be the centralized trading operator in the Philippines.