Dear Editor: We are writing in reference to a column
written by Mr. Bienvenido Oplas published on 17 August 2016 entitled,
"Brownouts, coal power and the electricity market".
We note the persistent claims made in your column that
Philippine Electricity Market Corporation (PEMC) is exactly replicating the
Department of Energy's (DOE) efforts to push for more renewable energy (RE)
resources into the system. It was also averred in your column that "since
PEMC continues to be a government controlled
corporation, can we expect PEMC to be more independent,
more candid, in assessing the harm, actual and potential of more REs in the
WESM and grid stability?"
In addressing these claims, you used the example of the
Australian Energy Market Operator (AEMO) in its initiative to conduct
reliability studies. It must be pointed out that the AEMO is not merely a
market operator but also a power systems operator that provides critical
planning, forecasting, and power systems information. Thus, it can conduct
studies on the impact of withdrawal of coal-fired generation capacity cognizant
of its responsibility in maintaining the reliability of the Australian power
grid. In contrast to the Australian structure, PEMC acts
only as the Market Operator responsible for the governance and operations of
the WESM. The function of maintaining the security, reliability and integrity
of the power grid is lodged with the System Operator. Against this context, it
is grossly inaccurate to claim that PEMC is expected to study the impact of
influx of RE resources in the grid.
With regard to the claim that PEMC is pushing for more RE
resources in the WESM as a result of its study on "merit order
effect" (MOE), this is a non-sequitur. The study published in our
electricity journal focused on the impact of FIT incentives based on
the actual generation of FIT-qualified resources in the
WESM as a result of priority dispatch accorded by Republic Act No. 9513
otherwise known as the RE Act of 2008. The MOE of the possible lowering of
energy prices in the electricity bourse is no form of endorsement of RE
resources on PEMC's part. In the study, the impact of MOE on the market affects
only those distribution utilities and directly-connected customers that
purchased from the market and does not necessarily translate to the direct
lowering of retail rates for end-users because of the FIT. The initiative of
PEMC in conducting studies and analyses affecting market outcomes is without
partiality to any resource.
Lastly, we wish to point out that PEMC remains a private
corporation and not a government-controlled corporation. We recognize the DOE's
role in the policy oversight of the WESM operations as envisioned pursuant to
relevant laws and
regulations.
We understand and appreciate your pursuit of balanced
reporting and as such, we deemed it necessary to address the assertions made in
your column.
In the interest of unbiased journalism, we request that
you allow us to air our side by publishing this letter in your paper, as is and
sans comment.
Respectfully yours,
Atty. Phillip C. Adviento,
Manager, Training and Communications
The Philippine Electricity Market Corporation (PEMC) is a
non-stock, non-profit corporation which was incorporated in November 2003 upon
the initiative of the Department of Energy (DOE) with representatives from the
various sectors of the electric power industry to be the governance arm of the
Wholesale Electricity Spot Market (WESM). The WESM began Commercial Operations
in Luzon in June 2006 and in the Visa yas in December 2010. In June 2013, PEMC
launched and integrated the Retail Competition and Open Access (RCOA) into the
WESM. The WESM is a centralized venue for buyers and sellers to trade
electricity as a commodity where its prices are based on actual use (demand)
and availability (supply). The WESM was created by Republic Act 9136, the
Electric Power Industry Reform Act (EPIRA) of 2001. This provided for the
establishment of an electricity market that reflects the actual cost of
electricity and lowers its price through more efficient production through
competition.
--------------See also:
Energy 72, FIT-eligible solar plants in the Philippines, June 22, 2016
Energy 73, Comments to DOE draft Department Circular on RPS, June 27, 2016
Energy 74, Mindanao business opportunities via coal plants, July 13, 2016
Energy 75, the PH solar confederation, electric coops and Meralco, August 01, 2016
Energy 75, the PH solar confederation, electric coops and Meralco, August 01, 2016
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