ERC urged to ease requirements in joining Mindanao spot market

MANILA, Philippines — The Department of Energy  is asking the Energy Regulatory Commission to relax its requirements to join Mindanao’s wholesale electricity spot market (WESM) to be able to commence commercial operations next year.

The agency has set the new commercial operations of WESM Mindanao on Jan. 26, 2020, DOE assistant secretary Redentor Delola said.

“The standing order of the department is to conduct commercial operations by Jan. 26, 2020.  We will actually issue a department circular commencing the operations of WESM,” he said.

However, there are some deliverables still pending prior to WESM Mindanao’s operations.

“Among the issues that are pending right now are the approval of PDM (price determination methodology),” Delola said.

The DOE had also asked the ERC to relax its requirements for power distributors and industry participants to join WESM Mindanao.

“Because we feel that if we really push for that, we’ll find it hard to achieve the target of Jan. 26, 2020,” Delola said.

The ERC earlier ordered all power distributors and industry participants in Mindanao to comply with all the requirements to ensure the overall readiness of the systems and procedures towards the shift to a new system and environment. 

ERC chairperson and chief executive officer Agnes Devanadera had said the completion of WESM registration is already delayed based on results of the recent 19th WESM Mindanao Readiness Assessment (WMRA) meetings conducted by the DOE.

The WMRA further noted the low turnout of participation in the trial operations program and the incidence of manual load dropping (MLD) despite oversupply of generating capacity in the region resulting from the DUs’ non-compliance to the IMDP.

According to the ERC, the completion of the WESM registry for Mindanao trading participants and their active participation–particularly of DUs–is essential to the commercial operations of WESM in Mindanao.

Originally, WESM Mindanao was targeted to start in October 2018, but was deferred to middle of this year due to the ongoing software audit being done on the new market management system to be used for the regional WESM.