OFFICIAL: WESM buyers must pay obligations, or …

AN OFFICIAL of Department of Energy (DOE) warned power buyers planning to join the
wholesale electricity spot market (WESM) in Mindanao that they would face getting cut from the grid
should they fail to pay their obligations when the market starts to commercially operate.

“This (cutting their connections) has to be done if they are not behaving well,” Energy Undersecretary Felix William B. Fuentebella said on Wednesday during the press conference at SMX Davao Convention Center in time on the launching of WESM for Mindanao.

The move, he said, would serve as among the safety nets to ensure the sustainable operations of the WESM and to prevent what happened during the implementation of the Interim Mindanao Electricity Market (IMEM) in 2013.

The failure of some buyers, particularly electric cooperative, during the implementation of the IMEM was among the reasons it was suspended in 2014.

Mindanao Development Authority Assistant Secretary Romeo M. Montenegro said earlier that the problem of electric cooperatives in failing to pay their obligations is a major
challenge that needs to be looked into when the commercial operations of the WESM starts.

“The (power) generators will ignore them,” Montenegro said.

But in a newspaper report, an official of a generating company said that, although there is no point in writing off the debts of the electric cooperatives, these obligations must not be the reson not to implement the electricity market in Mindanao.

The WESM in Mindanao was officially launched Wednesday at SMX Davao Convention Center with Energy Secretary Alfonso G. Cusi, Philippine Electricity Market Corp. (PEMC) president Melinda L. Ocampo and Presidential spokesperson Ernesto C. Abella.

Fuentebella said the market is made so generation companies can sell their excess power to distribution utilities even without contracts. The WESM in Mindanao, he said, is now undergoing trial operations, which would be conducted up to six months.

The market, he said, is joined by 91 power industry stakeholders, including 14 generating companies, 27 electric cooperatives and four private distribution utilities.

Isidro E. Cacho, manager of corporate planning division of PEMC, said they have applied to Energy Regulatory Commission last month to have an enhanced WESM throughout the country. One of the proposed enhanced features, he said, is shortening the dispatch interval from one hour to five minutes.

“The price shall be reflective on the supply and demand in the market,” Cacho said.

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