Cusi open to PSE takeover of WESM

MANILA, Philippines — Energy Secretary Alfonso Cusi is open to a proposal to allow the Philippine Stock Exchange (PSE) operate the country’s trading floor for electricity.

Cusi said the Department of Energy (DOE) is conducting a study on the PSE’s proposal to operate the wholesale electricity spot market (WESM). “It’s worth studying, we are studying it,” he said.

However, Cusi said there are still other possible options for the operation of WESM. “It’s a possibility so we’re doing studies and that is good for the industry,” he said. “We have to open our minds to all the possible options.”

PSE president Ramon Monzon made a proposal to the DOE to let it operate the electricity spot market.

WESM is operated by the Philippine Electricity Market Corp. (PEMC), an entity created under the Electric Power Industry Reform Act of 2001 (EPIRA) in 2003 to oversee market governance and perform the functions of the market operator.

PEMC, which has been operating the market since 2006, is a 15-man body led by the Energy secretary and composed of representatives from each sector of the electric power industry as well as independent members.

In July, Cusi ordered the creation of a transition committee for the interim management of PEMC and WESM. It will also assess PEMC’s existing structures, systems, and resources and propose a way forward for the WESM. 

The transition panel, chaired by Oscar Ala, former member of the Energy Regulatory Board, was given seven months from Aug. 1, 2017 to complete the transition. Other transition committee members are Jose Mari Bigornia, Jose Layug, Jr., Francis Saturnino Juan and Rauf Tan.

Cusi said the transition committee would foster transparency in the electricity spot market.

The transition committee will also determine whether it is time to transfer the operations of WESM to an IMO.

In December 2016, the DOE formed an independent committee to review and audit the financial, operational and systems records of PEMC to ensure competitive power prices and safeguard consumers.

The audit is intended to address concerns of certain sectors, assess PEMC’s budget proposal and also determine whether PEMC should transition to an independent market operator.