WESM GOVERNANCE and PHILIPPINE COMPETITIVENESS

The Asian Institute of Management Policy Center, in recognizing the need for efficient and reliable infrastructure to strengthen the competitiveness of businesses in the country, recently held a roundtable discussion entitled WESM Governance and Philippine Competitiveness, last April 19, 2006 at the JV Function Room 1, 4th Floor, AIM Conference Center Makati.

Speakers and discussants during the RTD included high-level officials from the following organizations:

Asian Institute of Management
Atin Ito Power Service Cooperative
Committee on Energy, House of Representatives
Department of Energy
First Gas Power Corporation
Insitute of Integrated Electrical Engineers of the Philippines
National Power Corporation
National Transmission Corporation
PA Consultant
Philippine Electricity Market Corporation
Power Sector Assets and Liabilities Management
Senate
United States Agency for International Development
University of the Philippines School of Economics

The Wholesale Electricity Spot Market (WESM) is one of the reforms mandated under the Electric Power Industry Reform Act (EPIRA) of 2001, intended to ensure quality, reliable, secure and affordable supply of electricity to the whole country through various measures. Through the discussion, various issues and recommendations were raised with regard to both the WESM and the EPIRA.

Businesses are weighed by relatively high power rates here in the Philippines compared to its neighboring countries. Thus, there is a great need to achieve competitive power rates to, in turn, allow enterprises to be competitive. The EPIRA, through WESM, aims to come up with better pricing for residential, industrial and commercial users by allowing price to be market-determined. Generation will be balanced with the demand of electricity.

This ideal of creating a level playing field for players and stakeholders in the electric power industry through the WESM must take into account the status quo of an environment with dominant buyers and sellers. For smaller end-users or consumers, protection may come through a more active role in governing WESM.

In aspiring for a spot market, there is a clear need for support from institutions. The role of the Energy Regulatory Commission (ERC) should transcend the regulatory agency that it was envisioned to become into an enabling and instrumental body for the power industry. Facilitating, instead of controlling the movements within the industry should be the perspective it should take in fulfilling its mandate.

The AIM Policy Center would like to thank Prof. Fernando Y. Roxas whose expertise in the topic has helped ensure a rich and insightful discussion. We would also like to commend the ACCM management and staff for their unwavering support in ensuring a smooth program. Finally, to the AIM family, which has been directly or indirectly instrumental in the success of the project, thank you.