Mindanao gets ready for WESM

WESM was established in Luzon and the Visayas in June 2006 and December 2010, respectively

WESM will also allow the region to dispose of its surplus to the national grid or buy if demand for electricity increases.

A Wholesale Electricity Spot Market (WESM) is being planned for commercial operations in Mindanao 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) last year, intends 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.

Having been put to trial by the PEMC in mid-2017, it 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.

Furthermore, some electric cooperatives in Mindanao opposed the idea of WESM because power supply at that point was still deficient. It prompted calls for more power plants although this later resulted with 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 in a chat with reporters on the sidelines of a launching event in Pasay City last week.

“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 would start with 85 trading participants comprising 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 for electricity increases.

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

WESM was established in Luzon and the Visayas in June 2006 and December 2010, respectively.

The Philippine Stock Exchange (PSE) has been inclined to merge WESM into its operations. In August this year, DoE 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.