WESM Mindanao to significantly cut power rates: Marcos

MANILA – President Ferdinand R. Marcos Jr. on Monday welcomed the launch of the Wholesale Electricity Spot Market (WESM) in Mindanao, saying it would help significantly lower power prices in the region.

During the ceremonial launching of the WESM in the Mindanao Grid in Malacañang on Monday, Marcos expressed optimism that the WESM will prop up investments and economic activity in the region, particularly in manufacturing and other energy-intensive industries that will eventually generate jobs and other opportunities.

“…The presence of WESM in Mindanao and an interconnected and interdependent grid in the country will not only ensure a level playing field in the competitive energy market but will also provide assurance to investors,” Marcos said

With the integration of the three main grids in the WESM, he said the country can hopefully achieve its goal of having a joint WESM for the entire nation and of attaining total capacity for the Philippines’ power demands.

“In the long run, WESM will help in sustaining power generation investments to meet the ever-growing electricity demand,” he added.

Marcos said he is also hopeful that the drop in fuel prices in the world market will lead to lower power costs not only for industrial users but also for household consumers.

For his part, Energy Secretary Raphael Lotilla echoed Marcos, saying the WESM could translate to more reasonable electricity prices in Mindanao.

“This means a lot for the people of Mindanao because now there is a Spot Market where the excess capacity in Mindanao plants can be sold and so they can source part of their supply from this excess capacity. And eventually, once Mindanao gets to be interconnected with Visayas and eventually Luzon then the rest of the country can benefit from the excess capacity in Mindanao,” he added.

Mindanao Development Authority (MinDA) Chair Secretary Mabel Acosta said the conditions are now ripe for Mindanao going into WESM.

“The improving power situation and availability of supply excess ranging 800MW-1,000MW daily and a portfolio of diversified energy mix, make it viable for Mindanao’s eventual transition from purely bilateral to market operated regime,” she said.

WESM, a centralized venue for trading electricity for large-scale buyers and sellers, aims to establish a competitive, efficient, transparent and reliable market for electricity.

It is a salient feature of the Electric Power Industry Reform Act or EPIRA Law of 2001 that has contributed to a more dynamic and competitive market for the power industry in Luzon and Visayas.

The launching of the commercial operation of WESM Mindanao marks a significant milestone towards Mindanao’s goal of building a robust energy system for the country by providing for a more efficient and transparent distribution of electricity.

Mindanao has an electrification rate of 87 percent and WESM in Mindanao will have a crucial role in the successful operation of the Mindanao-Visayas Interconnection Project (MVIP) as WESM allows efficient transmission and settlement of electricity exchanges.

At present, Mindanao has 4,321 megawatts of registered capacity, while its peak demand is only at around 2,167 megawatts.

With the establishment of WESM in Mindanao, around 2,000 megawatts of uncontracted capacities can now be sold in the WESM and be dispatched at any given time, providing supply to distribution utilities, electric cooperatives and other end-users when their contracted power plants are not available.

The launching will also affect power pricing, as WESM encourages generators to compete and sell their electricity at a lower price to secure a schedule for dispatch.

The government established WESM in Luzon in 2006, making the Philippines the first developing nation in Asia to introduce WESM successfully.

In 2010, WESM in the Visayas was also established.

With the presence of WESM in Mindanao, Marcos said the country now looks forward to completing the MVIP by end-March this year, which will benefit the people of Mindanao and the Visayas through the transmission of electric power between these islands.

WESM was created pursuant to Republic Act 9136, also known as the Electric Power Industry Reform Act (EPIRA) of 2001.