Legal issues hound IEMOP as WESM operator — PEMC

Published August 18, 2022, 3:48 PM

by Myrna M. Velasco

The Philippine Electricity Market Corporation (PEMC), the governance body of the Wholesale Electricity Spot Market (WESM), said legal questions still hound the claim of Independent Electricity Market Operator of the Philippines (IEMOP) that it was already duly sanctioned by the high court as operator of the spot market.

PEMC cited primarily IEMOP’s stature as independent market operator (IMO) based on the letter and intent of the Electric Power Industry Reform Act.

PEMC issued this statement following IEMOP Chairman Ralph Villanueva’s declaration that a recent decision of the Supreme Court already vested upon their organization the key role as market operator of the WESM.

The WESM governance body opined that the high court ruling cannot be ambiguously over-stretched in that milieu, because the verdict merely focused on a regulatory action that shall be rendered on IEMOP’s market fees application with the Energy Regulatory Commission.

“This is inaccurate. The petition filed by IEMOP sought to compel the ERC by way of a writ of mandamus, to act on the market fees application for calendar year 2021,” PEMC stressed.

It further noted that “the writ of mandamus could not have been issued for the purpose of conferring powers to IEMOP which it does not have or is not legally entitled to exercise under the law. “

The WESM governance body averred “again, the pronouncements relative to the IMO were made in the context of resolving the only issue presented, which was whether ERC may be compelled by mandamus to act on the CY 2021 market fee application.”

PEMC similarly lamented Villanueva’ assertion on stoppage of collection of WESM market fees supposedly due to lack of responses it has been getting relative to the series of correspondence that it had furnished the PEM Board.

“We are deeply concerned with the statement of IEMOP Chairman Villanueva as it implies that PEMC has been complacent in handling the recent events plaguing the WESM, particularly on the personality to collect market transaction fees as well as resolve the issues surrounding the market operator,” the spot market’s governing entity emphasized.

It expounded “truth is that due to the numerous issues raised about the legality and propriety of the creation of IEMOP, PEMC has been busy taking the necessary steps,” primarily in addressing a major concern raised by the ERC on its June 16, 2022 order that “only one entity should govern and operate the WESM – where PEMC is the recognized entity by the ERC.”

PEMC further indicated that it is at the process of “reviewing the IMO Transition Plan which effectively gave authority to IEMOP to operate the WESM.”

Prior to the exit of the Duterte administration, it was IEMOP itself which called on the Department of Energy (DOE) to revisit the Circular which paved the way for its creation, emphasizing that there might already be a need to “reassess the viability of maintaining the two-entity set-up of the WESM operations and governance.”