In a move to address the power supply situation in the Visayas Grid, the Department of Energy directed the implementation of the Visayas Supply Augmentation Auction Program (“VSAA”) particularly in the Cebu, Negros and Panay islands, to be administered by the Philippine Electricity Market Corporation (“PEMC”) with the System Operator.

The implementation of the VSAA was directed pursuant to Department Circular No. DC 2009_01_001 dated 16 January 2009 “Directing DOE attached agencies, all electric power industry, participants, consumers and various stakeholders to adapt and implement contingency measures to ensure adequate and reliable electric power supply in Visayas Grid particularly in the islands of Cebu, Negros and Panay”.

The VSAA is a day-ahead market which would allow embedded generators to sell their un-contracted capacity and grid-connected customers to sell an interruptible portion of their loads through an auction process. This is a form of demand-management as it would allow participants to manage their loads as well as to run their self-generation facilities, as means to ease the supply deficit and augment supply in the region.