BusinessWorld Online
November 7, 2013
MINDANAO’S perennial power woes are expected to soon be alleviated with an electricity trading platform set to start commercial operations before the end of the month.
A final regulatory hurdle involving an offer cap for the Interim Mindanao Electricity Market (IMEM) has been resolved, regulators noted in resolution published yesterday.
“[A]n offer cap… is hereby set at P32,000 per megawatt hour (equivalent to P32/kWh) and shall remain effective unless otherwise amended or revoked…,” the Department of Energy (DoE), Energy Regulatory Commission (ERC) and Philippine Electricity Market Corp. (PEMC) said in the resolution, which was signed last Oct. 7.
Mylene C. Capongcol, director of the DoE’s Electric Power Industry Management Bureau, said that with the matter settled, “commercial operations of the IMEM will push through on Nov. 26.”
The objective, she explained, is to allow all available capacities to be offered in the market at a certain price.
“We expect that the distribution utilities (DUs) in Mindanao will utilize the IMEM so that we can address the power supply problems. These DUs will source the shortfall of their power needs from the market,” Ms. Capongcol said.
“So once the DUs already have enough supply for their customers, there will no longer be rotating brownouts in Mindanao.”
Ms. Capongcol stressed that “the cost of electricity that will be offered will not go beyond the price cap. We hope it will even be lower.”
The joint resolution said the DoE, ERC and PEMC would review the cap “three months from the start of the full commercial operations of the IMEM and as may be often as necessary to determine whether an adjustment is necessary under prevailing circumstances.”
PEMC President Melinda L. Ocampo separately confirmed that the offer cap’s approval “paves the way for the full commercial operations of IMEM.” Commercial operations, she noted yesterday, “will mark the start of the trading of electricity in the market.”
Initial IMEM operations last Sept. 26 aimed to familiarize participants with the daily trading operations.
The platform, seen luring power generators that previously refused to sell excess capacity because payments were not guaranteed, is expected to provide for an additional 200 megawatts of power.