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M-co to Manage Electricity Market Implementation

Tuesday 30 March 2004

M-co Will Manage Phillipines Electricity Market Implementation

M-co has been contracted to manage the implementation of the market management system of the Philippines Wholesale Electricity Spot Market (WESM).

M-co signed a US$1.823 million consultancy contract with the Philippines National Transmission Company (TransCo) and the Department of Energy (DOE) at a special signing ceremony in Manilla on 17th March 2004.

“M-co is proud to have been selected for this important role in delivering a competitive electricity market for the Philippines,” Mr Christopher Russell, Chief Executive of M-co New Zealand said.

As the contracted project manager, M-co will provide expert advice to the WESM market operations group in establishing the necessary infrastructures and interfaces leading to the commercial operation of the WESM. M-co is also expected to provide consulting services in the co-ordination and supervision of the spot market.

“Our experience in successfully implementing electricity and gas markets in Singapore, New Zealand and Australia underpins our confidence in delivering this project,” Mr Russell said.

“Our proposal beat tenders from the USA, UK, Europe and Australia. It is a significant milestone in M-co's journey to play a key role in the development of Asian electricity markets,” Mr Russell said.

The Secretary of the DOE, Vincent S. Perez, thanked M-co at the contract signing for their confidence in the country’s economy.

“It is a clear indication of their choice to invest and to help the Philippines power sector,” Mr Perez commented. “The contracts signed also indicate the government’s aim to have an efficient, competitive, transparent and reliable electricity spot market.”

The WESM is the market where the trading of wholesale electricity will be made, wherein power plants will compete against each other to supply electricity to the grid. The project is to assist the market operations division of TransCo in testing and trialling their systems and processes in preparation for market commencement.

Legislation requires that this market operation function will be split out of TransCo and an Independent Market Operator established within a year of market start.

The Asian Development Bank and the Japan Bank for International Co-operation will fund the project through the Electricity Market and Transmission Development Project.

“The implementation project will start shortly now that the contract is signed and will be completed by mid 2005. The project will involve M-co staff advising TransCo on implementation plus provide training services,” Mr Russell said.

“Our expertise in wholesale electricity markets has been developed through innovative and complex market projects that have thrown up many hurdles for us to conquer. These experiences provide us with the necessary skill mix to assist the Philippines in their progress to a competitive market,” Mr Russell said.

In New Zealand M-co designed, implemented and has serviced the operations of the national electricity wholesale and retail market for a number of years. M-co was recently awarded the contracts to provide Market Administration, Pricing, Clearing and the Market Information support services to the electricity market now governed by the new Electricity Commission. M-co’s joint venture, Energy Market Company, implemented and now operates the

Singapore Wholesale Electricity Market. Our electricity market expertise has been contracted in Taiwan and Korea on projects dealing with market operations. In South Africa we advised the government on the design of their wholesale electricity market.

In Australia M-co implemented and now administers the NSW and ACT gas retail market. We are presently project managing the implementation of the South Australian and West Australian gas retail markets, and will play an administration role after market go-live in mid- 2004.


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