By MYRNA VELASCO

The grinding task of ensuring ‘fair and transparent’ trading outcomes in the electricity reserve market has been tossed as a responsibility of the Philippine Electricity Market Corporation (PEMC), which is also the governance body of the Wholesale Electricity Spot Market.

PEMC indicated that it will have specific ‘governance’ role in the reserve market, which serves as a supplemental function in its core responsibilities, hence, it will also be needing additional budget to carry out that newly enforced assignment.

“The Department of Energy (DOE) has directed PEMC to expand its compliance and market monitoring with the reserve market,” the firm noted.

Despite the added work for PEMC, however, it sounded off slight grumble that it is currently on ‘budget deficit’ as its overall expenses had been heftier versus cash flow.

“The company has been operating on a deficit since the approval of market fees have been subject to delays. This is caused by backlogs and reinstituted market fees that were based on previous years’ approvals by the ERC (Energy Regulatory Commission),” it stressed.

PEMC expounded that during its annual general membership meeting (AGMM) last month, it formally declared that it has  “excess of expenses over revenue of a little over PHP 90 million,” and that had been officially inputted in its financial report.

Due to its current financial strain, PEMC announced that it “intends to file an application with the ERC for approval of supplemental market fees to fund capital expansion.”

The firm qualified that its share of P200 million from the market fees collected from capacity trading in the WESM last year “will not be sufficient to cover the costs required for expanding operations.”

The underpinning policy for that newly assigned responsibility to PEMC had been drawn from Department Circular (DC) No. DC2024-06-0019, which sets amendments to the WESM Rules on dispatch protocol relative to the creation of the reserve market.

The reserve market was formally institutionalized as another layer of trading in the spot market since January this year – purposively to address the ancillary services needs of system operator National Grid Corporation of the Philippines.

Following the suspension of the reserve market’s operation in April due to surge in settlement prices, the resumption is expected to be enforced by the third quarter of this year.

PEMC argued that its governance mandate in the spot market “plays an integral role in making sure prices of electricity are stable in the country and provides the ERC with a regulatory framework to support in the governance of the electricity market.”