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Mindanao ‘not yet ripe’ for electricity spot market, says Bukidnon biz exec

MALAYBALAY CITY (MindaNews/ 22 November) – Mindanao is “not yet ripe” for the Interim Mindanao Electricity Market (IMEM) or the electricity spot market because at the moment there is “obviously a power shortage situation,” a business leader said on Wednesday.

“It is premature, not conducive at this time. The spot market will be fair only if there are both premiums and discounts,” said Roderico Bioco, president of the Bukidnon Kaamulan Chamber of Commerce and Industry Inc., noting that the plan to start the IMEM in March 2013 “will not work.”

“Tradable volume is really small yet,” he stressed during the business group’s general membership meeting, which also focused on the power situation in the island.

Bioco urged the government to start formulating the policy for the Mindanao electricity spot market through more stakeholder consultations.

The prospect of a spot market in two to three years will help usher in investments today, he said.

The spot market, Bioco added, could boost the efforts to attract investors in the power industry in the island, noting that prospective power producers can look at the spot market as an alternative market aside from forging power purchase agreements with distribution utilities.

The IMEM, according to the Department of Energy (DOE), could provide an additional capacity of 360 megawatts (MW) in Mindanao. The set up will tap power from embedded generation that is not yet directly connected to the Mindanao grid. Embedded generators include the big malls, steel mills, coal-fired power plants, and run-off river power plants.

A representative from the Busco Sugar Milling Company told the meeting that they have a surplus of nine MW that could possibly be placed in the spot market.

One of the presenters in the forum, Maria Teresa R. Alegrio, community relations officer of STEAG State Power, Inc., told MindaNews the spot market scheme is good for producers who have surplus power supplies.

STEAG supplies 200 of its 210 MW to the Mindanao grid. She said they may sell the 10 MW to the spot market.

The DOE announced it has asked the Energy Regulatory Commission for the spot market’s regulatory requirements.

The Philippine Electricity Market Corporation, operator of the wholesale electricity spot market (WESM) in Luzon and the Visayas, was also asked to run the Mindanao market, according to reports by Manila-based newspapers.

Alegrio, also president of the Cagayan de Oro Chamber of Commerce and Industry Foundation, said that the WESM cannot be implemented in Mindanao because the National Power Corporation’s Agus-Pulangi complexes have not been privatized.

She said this is the reason why the IMEM is being put in place in Mindanao.

But the Power Alternative Agenda for Mindanao (PALAG) said in a statement Wednesday the Mindanao spot market is “an added problem rather than a solution for us consumers.”

It said that IMEM will jack up electricity rates from P0.03-P0.72 per kilowatt hour (kWh).

The group, who is among those who organized a National Day of Protest on November 22, also called for the scrapping of the Electric Power Industry Reform Act (EPIRA).

“Since its enactment, the EPIRA has not done anything to lower electricity rates.  Instead, it has removed the ownership, management and control of government as it allowed the privatization of the government’s power assets to private corporations whose only intention in acquiring such properties is profit,” PALAG said.

Energy Undersecretary Josefina Asirit told reporters the interim spot market would provide an additional 360 MW in the region, but could raise power rates by P0.30/kWh.

Asirit said addressing the power shortage has a cost. (Walter I. Balane/MindaNews)

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