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MANILA - The Philippine Electricity Market Corp (PEMC) has asked regulators to allow it to tap unused funds to bankroll the proposed electricity market in Mindanao.
In a petition before the Energy Regulatory Commission (ERC), PEMC asked that it be allowed to allocate P34.3 million it collected from participants in the Wholesale Electricity Spot Market (WESM) to jumpstart the Interim Mindanao Electricity Market (IMEM).
PEMC said the amount would be used for the establishment of necessary infrastructure, acquisition of information technology systems and market software, and the cost of preparations for the IMEM.
The amount, however, "shall eventually be recovered from Mindanao participants in the IMEM, subject to a cost recovery mechanism to be submitted in a separate application for the approval of the honorable commission," PEMC said.
The Department of Energy (DOE) earlier ordered PEMC to study and come up with draft rules for the IMEM before March 10, and lead in its implementation by the second half.
The IMEM, as proposed by the DOE, aims to draw generating firms with uncontracted capacity and other industries that can produce electricity into selling their output to utilities in Mindanao, which has been suffering from unstable power supply.
Under the department circular, IMEM participants nominate the supply they intend to deliver or cut off from a utility a day before they actually do so.
Pricing will be based on a uniform framework settled at a market clearing price and merit order of participants similar to that in the WESM.
Power companies participating in the WESM, which is run by PEMC, offer their excess generating capacity by the hour. These offers are then matched to a utility's demand. Those with the lowest price offers get priority dispatch. The market price that would be paid to generators is based on the last offer that meets the demand.
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