WESM
"WESM:
The electricity market has been in the news lately, with the huge spike in the price of electricity for the customers of Meralco (70 percent of Luzon). My knowledge of this market amounting to not much, I decided to bone up on it before adding my voice to the cacophony of opinions, and recommendations. Here’s what I found:
The Epira (Electric Power Industry Reform Act) of 2001 mandated the Department of Energy (DOE) to establish the Wholesale Electricity Spot Market (WESM) that would “facilitate a transparent and reliable market for electricity, and, jointly with the electric power industry participants, formulate the detailed rules for the WESM.” This the DOE did, with inputs from the industry participants.
The Epira also entrusted to the Energy Regulatory Commission (ERC) the approval of the price determination methodology, which it did with the proper consultation.
An “autonomous group market operator,” the Philippine Electricity Market Corp. (PEMC) composed of industry participants—involved in generation, transmission, and distribution—was also created, chaired by the DOE. Its role was to “procure necessary infrastructure and technology, and achieve institutional and participant readiness for the commercial operation of the WESM.” With the DOE as chair, the board members of PEMC, aside from the ERC, are representatives of the generators, transmitters and distributors, plus four independent members (presumably representing consumers).
I bring this out to show that the government was very visible in making the market rules (WESM).
The first thing the DOE, ERC and PEMC did was to create the WESM Tripartite Committee (composed of themselves—i.e., the secretary, chair and president); it is supposedly interim, but it is still alive. Among others, this committee was tasked to “perform such other functions as may be necessary to PREVENT OR MITIGATE EXTREME PRICE VOLATILITY OR EXCESSIVE PRICING CONDITIONS THAT IMPEDE THE DYNAMIC AND PROPER FUNCTIONING OF
The electricity market has been in the news lately, with the huge spike in the price of electricity for the customers of Meralco (70 percent of Luzon). My knowledge of this market amounting to not much, I decided to bone up on it before adding my voice to the cacophony of opinions, and recommendations. Here’s what I found:
The Epira (Electric Power Industry Reform Act) of 2001 mandated the Department of Energy (DOE) to establish the Wholesale Electricity Spot Market (WESM) that would “facilitate a transparent and reliable market for electricity, and, jointly with the electric power industry participants, formulate the detailed rules for the WESM.” This the DOE did, with inputs from the industry participants.
The Epira also entrusted to the Energy Regulatory Commission (ERC) the approval of the price determination methodology, which it did with the proper consultation.
An “autonomous group market operator,” the Philippine Electricity Market Corp. (PEMC) composed of industry participants—involved in generation, transmission, and distribution—was also created, chaired by the DOE. Its role was to “procure necessary infrastructure and technology, and achieve institutional and participant readiness for the commercial operation of the WESM.” With the DOE as chair, the board members of PEMC, aside from the ERC, are representatives of the generators, transmitters and distributors, plus four independent members (presumably representing consumers).
I bring this out to show that the government was very visible in making the market rules (WESM).
The first thing the DOE, ERC and PEMC did was to create the WESM Tripartite Committee (composed of themselves—i.e., the secretary, chair and president); it is supposedly interim, but it is still alive. Among others, this committee was tasked to “perform such other functions as may be necessary to PREVENT OR MITIGATE EXTREME PRICE VOLATILITY OR EXCESSIVE PRICING CONDITIONS THAT IMPEDE THE DYNAMIC AND PROPER FUNCTIONING OF