By Myrna M. Velasco – January 16, 2018, 10:00 PM
from Manila Bulletin
Energy Secretary Alfonso G. Cusi will turn down any proposal that will eventually turn the independent market operator (IMO) of the Wholesale Electricity Spot Market (WESM) into a “for-profit entity.”
“That (IMO) is non-profit, because if that is for profit, I will not allow it. Then I will put a third party player,” he said.
Essentially, under the IMO Transition Plan, the independent operator entity will be incorporated as non-profit entity, but there is no prohibition for the IMO if it will eventually shift into a “for-profit” stature, depending also on the oversight that the restructured Philippine Electricity Market Corporation (PEMC) will exercise over the spot market.
As set forth, the IMO will take the core of “market operation functions” as pulled apart from the current PEMC structure; while the latter will be re-shaped as the governance body overseeing the market.
The “split of functions” of the two entities (PEMC and IMO) shall then be governed by an “Operating Agreement” to be signed by the relevant parties. The initial name thought out for the IMO is Wholesale Market Operator.
The plan then is for the PEM Board to select the five (5) individuals that will incorporate the IMO company at the Securities and Exchange Commission (SEC).
Cusi reiterated that he will let the PEM Board “undertake the selection process” for the IMO incorporators, although he qualified that such be made transparent and the selected individuals do not have ‘conflicts of interest’ or vested interests that will compromise level playing field in the market.
The energy chief stressed that “while all of the industry players are my friends, I have my responsibility to the public, to the consumers and the positions I am holding.”
The transformation of the WESM into having an independent operator had long been awaited by the restructured electricity sector, but it remains to be seen if the outcome is something that will be beneficial to the market players in particular and the consuming public in general.