PHILIPPINES Law and Practice Contributed by: Maria Lethel C. Alburo-Mejia, Puno Law
Nuclear Energy House Bill (HB) No 9293, also known as the “Philippine National Nuclear Energy Safety Act” was approved on its third and final reading at the House of Representatives. The bill aims to establish a legal framework to govern and facili- tate nuclear energy’s peaceful, safe and secure uses. It also creates the Philippine Atomic Ener- gy Regulatory Authority, which will have sole and exclusive jurisdiction to exercise regulatory control for the peaceful, safe and secure uses of nuclear energy and radiation sources in the Philippines. The bill has been transmitted to the Senate for concurrence. A similar bill, Senate Bill No 2498, was filed in the Senate and is pending with the Senate Com- mittee on Energy. 1.8 Unique Aspects of the Power Industry There are no other unique aspects of the power industry in the Philippines. 2. Market Structure, Supply and Pricing 2.1 The Wholesale Electricity Market The EPIRA mandates the establishment of a wholesale market that provides the mechanism for identifying and setting the price of actual variations from the quantities transacted under contracts between sellers and purchasers of electricity. This market, the WESM, became operational in the Luzon grid on 26 June 2006. It is a “gross pool, net settlements” market that enables suppliers and buyers to trade electric- ity as a commodity. The main purpose of the WESM is to provide industry stakeholders with the correct price signals in order to guide them in making various investments, as well as in
their operational decisions. The establishment of the WESM was a necessary precondition to robust competition being achieved in the mar- ket, because electricity prices prior to its opera- tion were significantly distorted. Prior to the initial operation, the DOE issued the WESM Rules which set the guidelines and stand- ards for participation in the market to provide a level playing field for all electric power indus- try participants. Such guidelines and standards include procedures for establishing the merit order dispatch for each time (ie, hourly) trad- ing period and determining the market-clearing prices. The ERC also approved and issued the price determination methodology for the WESM. The Philippine Electricity Market Corporation (PEMC) acted as the market operator of the WESM. Pursuant to the EPIRA, the PEMC trans- ferred the operations of the WESM to the Inde- pendent Electricity Market Operator (IEMOP) in 2018. The PEMC continues to be the gov- erning body of the WESM, through its board of directors composed of representatives of elec- tric power industry participants and independ- ent members. The IEMOP serves as the main platform for wholesale electricity trading by, among other things, managing the registration for new entrants, receiving electricity bids and offers, demand forecasting, calculating real- time market prices and dispatch schedules of participants, monitoring the day-to-day market trading, and handling billing, settlement and col- lections. The DOE and the ERC imposed the follow- ing as mitigating measures to protect against extreme price volatilities: (i) an offer price cap of PHP32.00/kWh; and (ii) in case of sustained high prices of an average of PHP9.00/kWh for 168 trading intervals, a secondary cap of PHP6.245/
267 CHAMBERS.COM
Powered by FlippingBook