Mindanao rates seen doubling under WESM

CAGAYAN DE ORO CITY—A group of power distributors in Mindanao is fighting a planned electricity supply trading system that the group said would inflate electricity costs everywhere in the island to as much as P32 per kilowatt hour, double that of prevailing rates.

The Association of Mindanao Rural Electric Cooperatives Inc. (Amreco) said it would continue to fight plans to set up a version of the Wholesale Electricity Spot Market (WESM) in Mindanao.

WESM, which is being used in Luzon, is like a stock market where power generators offer electricity for purchase by the highest bidder, usually bulk consumers like factories or commercial buildings. In WESM, rates vary according to demand and supply with rates being highest when demand is at its peak and supply is low.

Sergio Dagooc, Amreco president, said at a forum here that WESM would be detrimental to consumers in Mindanao as it sets a price ceiling of P32 per kWh, double the prevailing rate of P15 per kWh.

A group of power industry experts would be formed to study the details of WESM and present this to Amreco, Dagooc said.

Next week, Dagooc said alternatives to WESM would be submitted by his group to the Energy Regulatory Commission (ERC), which decides on petitions by power firms to raise rates.

Adelmo Laput, president of the Amreco Power Supply Aggregation Group Corp., said the alternative electricity market that Amreco is working on would do away with the P32 per kWh price ceiling.

It would bid out electricity from generators based on ERC-approved rates but with a cap much lower than P32, Laput said. —JIGGER J. JERUSALEM