IEMOP no authority to collect market fees – Nograles

Published February 23, 2020, 12:00 AM

by manilabulletin_admin


The Independent Electricity Market Operator of the Philippines Inc. (IEMOP) is getting buried deeper into legal entanglements, after it was uncovered that its collection of roughly a billion peso market fees from trading participants of the Wholesale Electricity Spot Market (WESM) had not been approved by the Energy Regulatory Commission (ERC).

Lawmaker-whistleblower Jericho Jonas “Koko” Nograles of Puwersa ng Bayang Atleta (PBA) Partylist, disclosed that based on document-submissions made by IEMOP last February 14, it was unearthed that the transfer of market fee collections to it by precursor-firm Philippine Electricity Market Corporation (PEMC), had not secured direct regulatory approval.

“We required them (IEMOP) to submit their ERC approval. What they submitted to us had been the ERC decision for case No. 2013-137, but the problem here is, ERC approved the collections for another company (PEMC), and not for them. What this means is: It (IEMOP) does not have ERC approval to collect,” he stressed.

Nograles indicated that the daily collection of market fees of IEMOP hovers at P3.0 million to P4.0 million – mainly from the WESM trading participants like the power generation companies (GenCos) that have been offering their capacities into the spot market. That entails then that annual collections could be as much as P1.080 billion to P1.44 billion.

Market fees are being collected from WESM participants; and these are deemed correspondingly passed on in their billings and then onward to the electricity bills of consumers.

Given that uncovered breach in the WESM, Nograles has similarly called on the Office of the Ombudsman to step in and investigate the alleged violations committed by government officials and other individuals into the questionable incorporation and the underlying business operations of IEMOP, which is the current market operator of the WESM.

“The Ombudsman can investigate motu propio (on its own volition) and it’s also possible that after our Committee investigation, we will forward it to the Ombudsman for appropriate action,” the lawmaker stressed.

He is zeroing in on the potential graft and corruption charges that could be filed against government officials because of “familial affinity” they have with key officers of IEMOP as well as with its governing body PEMC – chiefly on the alleged misdemeanors committed in the operating agreement (OA) of the two firms.

The lawmaker said such alleged illegal handiwork constitutes violation of Section 3(g) of Republic Act 3019 or the Anti-Graft and Corrupt Practices Act, which treads on “entering, on behalf of the government, into any contract or transaction manifestly and grossly disadvantageous to the same, whether or not the public officer profited or will profit thereby.”

The legal personality of IEMOP, which has been incorporated with a meager paid-up capital of P7,000, is the one that is being intensely questioned in series of investigations by the House Committee on Energy – primarily because the assets as well as the collection of WESM market fees transferred under its charge came from PEMC. Under prevailing statutes, PEMC is legally recognized as a government-owned and controlled corporation (GOCC) based on an Executive Order issued by the Aquino administration.

The Department of Energy (DOE) said IEMOP is a non-stock, non-profit organization, but lawmakers investigating the matter are not exactly giving credence to that assertion.

Nograles further divulged the huge salaries and benefits granted to IEMOP employees and executives totaling P388 million yearly, which gobbles up sizeable chunk of their total market fee collections.

He said the alleged legal infractions on the market fee collections, the linked families in the two corporations with government officials at the DOE and the National Transmission Corporation (TransCo) as well as the salaries of the employees will be the next focus of investigations of the energy committee of the legislative branch.