Electricity spot mart seen starting by July

The Energy Regulatory Commission (ERC) believes the already-long-delayed commercial operation of the wholesale electricity spot market (WESM) could finally start by late next month or by early July. ERC chairman Rodolfo B. Albano, Jr. said in an interview late last week that the regulator is fast-tracking the approval of the spot market’s price determination methodology -- the formula for calculating the price of power traded -- by setting a definite timetable for hearings on this matter. In fact, ERC has already completed hearings for WESM operator Philippine Electricity Market Corporation (PEMC) and will give other interested parties at least a week to present their arguments on the pricing methodology. Mr. Albano said he expects ERC to approve a methodology before ERC Commissioner Oliver B. Butalid, who heads the ERC panel conducting the pricing hearings, retires this June 26. PEMC president Lassi-Matti A. Holopainen earlier said his firm could start the spot market within "two weeks’ notice" to do so. Reacting to criticisms heaped on ERC for delaying the opening of the spot market, Mr. Albano said PEMC’s withdrawal of the requirements it submitted to the regulator for the commercial start of WESM had caused the delay. Arguing it had to make sure its submissions could weather any legal scrutiny later on, PEMC withdrew last February the documents it gave ERC for the start of WESM operations after the Supreme Court nullified Manila Electric Company’s cost adjustment, citing a lack of notifications in newspapers, which it ruled was a requirement in fixing electricity costs. Out of fear such controversy could rise in the middle of WESM’s operation and disrupt it, PEMC decided to review publication requirements before submitting the requirements again. Mr. Holopainen also underscored the need to address concerns of other stakeholders in WESM, particularly on ensuring a level playing field among competitors, both big and small. WESM is designed to give big electricity users a choice of power generators and distributors to tap, hence, ensuring lower prices. "We are well on our way [to starting WESM’s commercial operation], so we hope that tariff and regulatory issues raised by the coops will be addressed fully by the ERC," he said. He also appealed to the ERC to hasten the approval of the National Transmission Corp.’s (Transco) subtransmission divestment contracts with electric distributors, as a way of ensuring the latter would provide electricity reliably. Transco president Alan Ortiz also appealed to ERC to approve its application for a certificate of authority as a metering services provider for WESM. "We need to install meters in both the generation and distribution sides to successfully operationalize retail competition, and this takes time. We appeal to ERC to approve our request submitted in January 2005," he said in the statement. -- IPP