Electricity spot market kicks off despite worries

The wholesale electricity spot market (WESM) in the Visayas began operating two days after Christmas even as a party-list congressman representing the power cooperatives sector reiterated his call for adequate safeguards to protect ordinary consumers from possible increases in their electricity bills.

The “spot market” is a mechanism provided by law that allows power utilities to buy a portion of their supply requirements from independent power producers at rates that are supposed to be competitively low. The “spot market” is based in Cebu City.

But 1-CARE party list congressman Salvador “Kiting” Cabaluna III said the concept will work only if there is adequate supply of power and the power utilities have already secured supply contracts to cover their minimum requirements.

As it is, Cabaluna said the situation is just the opposite: supply is short, and many cooperatives have expired, or expiring, power supply agreements.

“Under the circumstances, the electric cooperatives are vulnerable, because they would be forced to buy a substantial portion of their requirements from the spot market,” he said.

He said IPPs usiing diesel fuel will likely play the market to fill the supply requirements of many cooperatives. “We all know that diesel plants sell at higher rates than, say, geothermal or coal,” he said.

Cabaluna said in Panay island, only Panay Electric Co. and Iloilo Electric Cooperative I (Ileco I) have secured power supply agreements to ensure stable rates. The other cooperatives risk having to pay the current price of the spot market, no matter how high, as there is no other source of power, he added.