Invalidation of IEMOP deal for WESM pushed

Published February 12, 2020, 12:00 AM

by manilabulletin_admin


For lack of legally binding imprimatur from the Office of the President, the deal on the institutionalization of the Independent Electricity Market Operator of the Philippines (IEMOP) for the Wholesale Electricity Spot Market (WESM) has been sought for invalidation.

Party-list Representative Jericho Nograles of the Puwersa ng Bayaning Atleta (PBA) opined that the “operating agreement” (OA) entered into between IEMOP as the purported independent market operator (IMO) of the WESM and its precursor-firm Philippine Electricity Market Corporation (PEMC) could be rendered “void ab initio” or invalid from the very start, hence, it is warranted that it shall be scrapped.

Nograles said the claim of PEMC that it was able to transition from a government-owned and -controlled corporation (GOCC) to a fully privatized company, thus allowing the transfer of its assets to IEMOP, “was not proper and legally binding because this was not approved by President Rodrigo Duterte.”

In a recent hearing of the House committee on energy, no less than the Governance Commission for GOCCs (GCG) had stated that “PEMC needs to go through a process in order to become a private entity,” – that is to comply with the prescriptions of Republic Act 101149 or the GOCC Governance Act of 2011.

According to Nograles, “to become a private entity, PEMC must seek the endorsement of the GCG to the President of the Republic who will then make the final approval.”

In the process carried out by PEMC, Nograles emphasized it “has neither the recommendation of the GCG nor the approval of the President which makes the PEMC-IEMOP contract void from the very beginning.”

In addition, the lawmaker stressed that “the continued collection of market fees from consumers is illegal because the contract is illegal.”

Nograles expounded that on his belief “the President was blindsided that something this massive happened,” while asserting that “if the President knew that this is going to happen, he would have affixed his signature to privatize PEMC.”

It has to be noted that an Executive Order issued by the Aquino administration has classified PEMC as a government-owned and controlled corporation or GOCC; and that has not been reversed or changed until the time that IEMOP was established.

Nograles similarly rapped that in the last two Congressional hearings on this issue, it was already established that the agreement between PEMC and IEMOP “was highly anomalous but it has yet to pinpoint the hand behind this deal.”