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Power market testing trading systems ahead of Mindanao WESM

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THE power market operator is conducting parallel operations of its old and new trading software as it expects the wholesale electricity spot market (WESM) in Mindanao to start operating once the other participating entities are ready.

“Seamless na (operations are seamless),” Jose Mari T. Bigornia, president and chief executive officer of the Independent Electricity Market Operator of the Philippines, Inc. (IEMOP) told reporters.

Basta kami ready kami on the back end (We are ready on the back end),” he said. “We’ll make sure that all the systems work.”

He said the delay was largely due to the low level of acceptance among energy market participants in Mindanao, which is thought by the industry to have excess power output until 2021 or 2022.

Mr. Bigornia said many power generation companies in the southern island remain without a power supply agreement that an electricity spot market could have provided a venue to sell their excess capacity.

The Department of Energy (DoE), under its current leadership, has been pushing for the establishment of a WESM in Mindanao. It has been laying the groundwork in the southern island as it said the move would ensure the delivery of “quality, reliable, secure and affordable electricity” to the area.




In Luzon and the Visayas, WESM is the centralized venue for buyers and sellers to trade electricity as a commodity where its prices are based on actual use, or demand, and availability, or supply. The Mindanao grid has yet to be connected to the Visayas.

The target market participants in Mindanao are power generation companies, private distribution utilities, electric cooperatives, and bulk power users that are directly connected to the transmission grid. It also includes privately owned National Grid Corp. of the Philippines as the system operator.

Mr. Bigornia said his office had so far registered about 80% of the target participants. He said the market operator needs 100% registration because the sudden entry of the remaining 20% might have an effect on the trading software.

“But 80% is a very good benchmark [for us],” he said.

He said among the reasons holding up electricity trading in Mindanao is the “price determination methodology” (PDM) that remains for approval by the Energy Regulatory Commission (ERC).

“That’s very important,” he said, adding that the regulator continues to seek data from IEMOP.

IEMOP is a non-stock, non-profit corporation established in May 2018 to assume the market operator functions of the Philippine Electricity Market Corp. for WESM. — Victor V. Saulon

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