Independent body soon to oversee power spot market

MANILA, Philippines — The long-delayed independent market operator (IMO) will start operating the wholesale electricity spot market (WESM) by mid-year, Department of Energy (DOE) Secretary Alfonso Cusi said.

The energy chief met with the Philippine Electricity Market Corp. (PEMC) transition team and set the timeline on when the IMO will be implemented.

PEMC is the current operator of WESM, the country’s trading floor for electricity.

“We have already finished that…By February, there will already be an appointment of the president of PEMC.

By June, the IMO is in place,” Cusi said.

The DOE has been seeking industry input as it lays down the rules for the transition of the WESM to an IMO.

The circular shall promulgate and adopt the IMO transition plan which sets out the formation and structure of the IMO, the resulting WESM governance structure, and the manner by which transition to the IMO shall be accomplished. 

The IMO is an independent entity from electric power industry participants and from the government to operate the WESM on a non-profit basis. 

“The details left is who are the people we’re going to make as incorporators (of the IMO). I’m just being very careful on the choice of people, I want to make sure that they don’t have any connection, conflict of interests,” Cusi said. 

Once the IMO is set, they can start operations, the transfer of assets and of people.

The energy chief, who currently sits as the chairman of the PEMC board, will also exit to make the market operator truly independent.

“You will see an independent market operator, and an independent PEMC without DOE,” Cusi said.

In August 2017, the DOE created a transition panel, chaired by Oscar Ala – a former member of the Energy Regulatory Board, to assess PEMC’s existing structures, systems, and resources and propose a way forward for the WESM to meet the challenges ahead.

It was given seven months from Aug. 1, 2017 to complete the transition.

The PEMC was incorporated in 2003 and was constituted as the autonomous group market operator to oversee market governance and perform the functions of the market operator in the WESM, which was created under the Electric Power Industry Reform Act.

But under EPIRA, the WESM must be transferred to an independent market operator or IMO one year after its establishment.