Activists call for suspension of WESM operations

Citing repeated occurrences of market abuse and the spot market’s failure to provide consumers least cost power, workers and activists belonging to the labor coalition Nagkaisa and the Power to the People (P2P) called for the suspension of the operations of the Wholesale Electricity Spot Market (WESM).

They made this call during a picket rally held at the offices of the Philippine Electricity Market Corporation (PEMC) located at Robinson’s Equitable Tower in Ortigas Center. PEMC is the operator of WESM.

The call was also made three days after PEMC came out with its recomputed rate that brought down by more than half Meralco’s record-high increase of P4.15 per kWh in generation charge previously approved by the Energy Regulatory Commission (ERC).

On Tuesday PEMC came out with its recalculated market prices in compliance with the Energy Regulatory Commission (ERC) order of March 3. For the December 2013 billing, it set the new spot market rates at P6.007 (76.35 percent lower) than the P25.404 per kWh, and P6.246 (77.98 percent lower) than the original P28.367 per kWh for the billing month of January 2014.

“So why continue operating a spot market system that miserably failed to provide low-priced power during eight years of implementation,” said the two groups in a joint statement.

According to the groups, WESM was supposed to be the cornerstone of the Electric Power Reform Act or EPIRA in pursuing its policy objectives of ensuring competition in the industry that would eventually result to the lowering down of power rates. In reality, however, WESM had become the trading center of the most expensive power in the world.

“WESM is nothing but a farce, it should be shut down,” argued the groups. They pointed to the following reasons why its operations should be suspended:

  • The March 3 order by the ERC found evidence of market abuse and market failure. The market was gamed thus the order for PEMC to re-compute the market prices for the whole year of 2013.
  • Market abuse is a repeated occurrence since WESM started operating in 2006 owing to high market concentration.
  • Membership in the PEMC Board is by representation among the power players therefore it is not an independent operator. Board members also receive fat perks, including high-end SUVs.

Activists likewise challenged the government to start cleansing the ERC, PEMC, and the DoE who are not clean, incompetent, and captured by private power.

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