ERC readies PEMC audit

by Lenie Lectura – December 31, 2015

from Business Mirror

THE Energy Regulatory Commission (ERC) intends to pursue the conduct of an audit on the Philippine Electricity Market Corp. (PEMC), operator of the country’s trading floor for electricity.

“The audit is just a first step to really determine the additional initiatives that we have to undertake with respect to the regulation of the market. So if we can determine if we should undertake additional initiatives to make us more effective, then we will do that,” ERC Chairman Jose Vicente Salazar said.

“Our bids and awards committee [have] already published the request for expression of interest and the process is now ongoing for the procurement of an auditing firm which will now conduct the audit on PEMC,” he added.

It can be recalled that Sen. Sergio Osmeña, chairman of the Senate Committee in Energy, called on the ERC in October to conduct an independent audit on PEMC since the latter is not subject to audits by the Commission on Audit (COA) being a private corporation.

The PEMC Board is a 15-man body made up of representatives from each sector of the electric power industry, as well as independent members. It is chaired by the secretary of the Department of Energy (DOE). The DOE also appoints the member of the board.

SGV & Co. has been engaged by PEMC as external auditor since 2006.

Under the Electric Power Industry Reform Act of 2001, PEMC is supposed to last for only one year and would transition to an independent market operator (IMO). So far, PEMC has existed for 12 years now.

Osmeña had pointed out that the energy secretary should be out of PEMC or IMO as its chairman because it cannot be really be independent of the government if the chairman is the energy chief, which issues policies, some of which becomes part of the rules of PEMC and Wholesale Electricity Spot Market. PEMC did not issue any comment.