Meralco: No hand in WESM prices
Sunday, October 15, 2006
The Manila Electric Company (Meralco) categorically stated that it had nothing to do with the alleged increase in the price of electricity on the third month of the wholesale electricity spot market (WESM).
Meralco President Jesus Francisco said the increase was borne out in the study of the PEMC market surveillance committee. In fact, Meralco had called the attention of the PEMC about the increase quite early.
Francisco, who is also director in PEMC, hopes this increase can still be prevented in the ongoing investigations by a committee of the PEMC.
Meralco clarified that it is not a seller in the spot market.
"We merely source power from the WESM. Generation companies assume full responsibility for how and when their plants are dispatched," said Nixon Hao, Head of Meralco’s Energy Management and who also sits in the PEMC rules change committee.
"We would like to stress that Meralco is not a seller in the market and is not in a position to manipulate the price. Although it is a fact that the two Independent Power Producers with Meralco contracts have to schedule their generation through WESM, they are actually only bidding zero, so in that case they are in no position to set the price", Hao stressed.
Meralco explained that IPPs sell directly to Meralco and are therefore paid at contracted price and not via the WESM clearing price.
"The market however operates in such a way that all generating companies including the IPPs bid via the WESM. So even if the IPPs have bilateral contracts with Meralco, they are still obligated to bid through WESM in order for their plants to be dispatched", Hao said.
Meralco’s energy management head added that based on WESM’s trading, the last plant that is dispatched sets the market clearing price.
"Based on the previous and actual trading in the market none of our IPPs had been the last plant dispatched", Hao said.
"We would like to stress that we in Meralco are always looking for ways to bring lower power cost to all our customers," he concluded.
Meralco in an earlier statement lauded the opening of the Wholesale Electricity Spot Market (WESM) saying this would hasten the advent of a truly "competitive environment in the power industry".
It will be recalled that Meralco Chairman and Chief Executive Officer Manuel Lopez wrote President Gloria Macapagal-Arroyo offering Meralco customers with a demand of at least 1 MW to avail of the time-of-use rates (TOU) of the National Power Corporation.
Various business organizations lauded Meralco’s move. This was intended to address the delay in open access due to the delayed privatization of Napocor generating assets.(JAL)
posted by philpower @ 5:53 AM,
