No rush to shift PEMC into independent operator

MANILA, Philippines - Sen. Sherwin Gatchalian sees there is no need to rush in shifting the spot market to an independent market operator (IMO), even as the law calls for it, as the transition needs further evaluation.

Philippine Electricity Market Corp. (PEMC), the operator of the Wholesale Electricity Spot Market (WESM), is working the way it is, the lawmaker said.

“I think there’s no sense of urgency for them to become IMO,” Gatchalian said. “It’s functioning the way it is right now.”

The lawmaker, who chairs the Senate committee on energy, said the transition still needs to be evaluated.

“PEMC has been pushing to become an IMO but my sense there is there’s no rush to look at that,” he said. I think we have time to evaluate that.”

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

But according to the Electric Power Industry Reform Act (EPIRA) of 2001, the WESM must be transferred to an independent entity or IMO one year after its establishment.

During the Senate public hearings held in October 2015, former senator Sergio Osmeña III called on the Energy Regulatory Commission (ERC) to conduct an independent audit on PEMC covering the period 2006 to 2014 because it is not subject to audits by the Commission on Audit because it is a private entity.

ERC has then tapped audit firm Reyes Tacandong & Co. to conduct the audit and check whether the fees imposed by the market operator have been reasonable.

The audit will impact PEMC’s budget proposal and its push to become an IMO.

However, earlier this year, PEMC was classified as among the government-owned and controlled corporations (GOCC) under Executive Order 203.

Part of the evaluation is looking at the legal structure of PEMC whether it is government-owned or private, Gatchalian said.

“Honestly, i have to look at it closely,” he said. “We have to look at that, the interpretation of the law.”