Proposed VSAAERC approves VSAA registration
The ERC (Energy Regulatory Commission) issued on 22 April 2009 its Order provisionally authorizing the DOE (Department of Energy) through the PEMC (Philippine Electricity Market Corporation) to execute the necessary preparatory steps towards implementation of its proposed (VSAA) Visayas Supply Augmentation Auction scheme. With this approval, PEMC may now proceed to register qualified customers willing to be disconnected from the grid at certain times, especially during peak hours of the day when there is electricity shortage, and generation companies, which have available or uncontracted capacity to generate power during these periods.
Under the proposed VSAA, these qualified customers willing to be disconnected from the grid, or what is known as interruptible load, and these generation companies that will be asked to run their plants during periods of shortage, and thereby augment the supply of electricity for the system, will be paid for being interrupted (for the interruptible load) or for the power they will generate (for the generation companies). The amount to be paid to them is determined based on the offers they will make to the VSAA administrator, which is PEMC. PEMC then will come out with a merit order list as to which load or plants will be prioritized in providing the service, based on which offers are cheapest. Whatever payments made to these VSAA participants will be shared as additional generation cost of the participating distribution utilities, which in turn will pass this on to their respective end-users.
The DOE alleges that with this scheme, the supply shortage problem in the Visayas will be addressed since capacity will be freed or made available for the system (in the case of interruptible load) or will be added (in the case of generation companies). Participation in the scheme is purely voluntary, however, interruptible load connected to distribution utilities can only participate through their respective distribution utilities.
In evaluating DOE's application for provisional authority to implement the VSAA, the ERC identified certain issues that need to be threshed out in the hearings of the application, which started on 14 April 2009. In the meantime, recognizing the urgency of the supply problem in the Visayas and realizing that the final decision on whether or not to authorize the full implementation of the VSAA may depend on the level of interest of the targeted participants, the ERC decided to allow the conduct of the preparatory acts for the implementation of the scheme, particularly, the registration of these participants.
"The ERC is committed to expediting the evaluation and, if warranted, the approval and implementation of any proposed workable solution to the supply problem in the Visayas," ERC Chairperson Zenaida G. Cruz-Ducut affirmed.
April 22, 2009