University of the Philippines Los Baños
Monday, 20 November 2017 15:27

UPLB continues to enjoy lower electricity cost on 5th month of WESM membership

UPLB has saved PhP 3-4 million pesos in electricity cost five months after becoming a direct member of the Wholesale Electricity Spot Market (WESM).

This is based on the estimates made by Engr. John Davis Mangubat of the Office of the Vice Chancellor for Planning and Development (OVCPD).

Engr. Mangubat came up with the estimates by comparing the generation costs and generation rates for June-October 2017 with the generation costs and generation rates from the same months in 2014-2016.

Generation cost is the total amount of electric bill, while generation rate is the price of electricity per kWh consumed.

Comparing the generation costs paid for 2017 with the average generation cost for 2014-2016, Engr. Mangubat came up with an estimated PhP 2.7 million in savings for UPLB.

Then, he computed the amount saved based on UPLB’s reduced generation rate after becoming a WESM member. By multiplying the reduced generation rate with UPLB’s total electricity consumption, figures showed that UPLB saved PhP 4.4 million for the past five months of direct WESM membership.

 “UPLB was able to secure an effective generation rate lower than PhP 4/kWh from its WESM membership and from applying the bilateral contract quantity (BCQ) nomination with a generation company (GenCo),” Engr. Mangubat said.

BCQ nomination, Engr. Mangubat explained, is the amount or quantity of electricity that UPLB buys or expects from its supplier. “Before we became a direct member of the WESM, our supplier used to decide and submit the BCQ nomination for us,” he said.

Now that UPLB is a WESM member, the University has gained a certain level of control on its power supply by directly telling the GenCo, which would then inform the Philippine Electricity Market Corporation, the market operator of the WESM, the level of demand and the associated electricity we would buy from them and when we will buy it, Engr. Mangubat explained further.

“UPLB is now able to decide whether the electricity should be bought from the market when prices are lower than PhP 4/kWh, or from the GenCo when prices in the market are higher than PhP 4/kWh,” he said.

As a WESM member, UPLB pays its electricity at an effective rate of as low as PhP 3.72 per kWh at certain months, unless inevitable situations occur, like network congestion and low reserves in the grid.

Such risks, Engr. Mangubat said, could be mitigated through a deeper understanding of the electricity market. According to him, the UPLB Department of Electrical Engineering and the UP Diliman Electrical and Electronics Engineering Institute plan to collaborate and establish an electricity market research laboratory.

“It will enable us to study the market better and assist the OVCPD in BCQ nomination, which could allow us to continuously make savings for the University,” Engr. Mangubat said.

“As the first and only university in the Philippines to become a direct member of WESM, UPLB has actual market experience and access to market data, which can be used for future studies that could help advance electricity market research in the country,” he added. (Mark Jayson E. Gloria)