WESM operator probe sought

Published January 21, 2020, 12:00 AM

by manilabulletin_admin


While admitting that the incorporation of an independent entity to operate the Wholesale Electricity Spot Market (WESM) was initiated through a Circular, the Department of Energy (DOE) falls short when it comes to explaining the questioned ₱7,000 incorporated company manning the spot market.

A Congressional inquiry is being pushed to unravel the puzzle on the incorporation of the Independent Electricity Market Operator of the Philippines (IEMOP) that kicked off as WESM operator roughly two years ago.

When asked if the DOE can directly deny the existence of the ₱7,000-company and who are the incorporators, no concrete response had been given to the media by the department as of this writing.

In a statement, the DOE noted that spinoff company IEMOP came into being by virtue of DOE Department Circular 2018-01-0002 that was issued in January 2018 relative to the independent market operator (IMO) transition plan instituted for the WESM then.

The department added “the IEMOP incorporation was approved by the
transition team based on the plan outlined in the Department Circular.”

Essentially, IEMOP had been carved out from the Philippine Electricity Market Corporation (PEMC), which had been the operator of the WESM for the past 12 years or until 2018. At its takeover of the WESM operations, most of the technical personnel from PEMC had been absorbed by IEMOP, but there had been questions on the appointment of board members who lack knowledge on the intricacies of the energy sector.

The selection of the board members at IEMOP primarily raised some questions especially so since their selection went through the scrutiny of Energy Secretary Alfonso Cusi.

In the DOE statement, the agency just stipulated that it “opted to create a separate entity composed of Filipinos who have acquired the necessary expertise to operate the WESM and ensure that the market will be managed by Filipinos.”

Under the Electric Power Industry Reform Act, the spirit and intent of the law is to tap an independent market operator with resources that will be parallel or at least bigger than the WESM – which at the time of the framing of the law essentially portends that only foreign entities would be able to carry out such task.

But the policy set out under the DOE Circular was just to transfer market operation function to IEMOP “based on the operating agreement between PEMC an d IEMOP dated 18 September 2018 and people running the system were disengaged from PEMC and hired by IEMOP.”

Fundamentally, the energy department emphasized that “IEMOP was a ‘spin off’ of PEMC towards independence in market operations.”