PEMC, IEMOP fleshing out details of WESM operating agreement

By Myrna M. Velasco – August 3, 2018, 10:00 PM
from Manila Bulletin

With the government finally relinquishing chairmanship to the private sector, governing body Philippine Electricity Market Corporation (PEMC) and Independent Electricity Market Operator of the Philippines (IEMOP) are now fleshing out the details of the Operating Agreement (OA) for the Wholesale Electricity Spot Market’s (WESM) fully private system of operations.

PEMC logo

According to IEMOP President Francis Saturnino C. Juan, the specific concerns to be tackled in the OA are those on: Staffing of both companies; sharing and/or physical delineation of work spaces; budget allocation; as well as assumption of loan payments and liabilities, among others.

The PEMC chairmanship in particular was formally turned over by Energy Secretary Alfonso G. Cusi to private sector-elected Chairman Noel V. Aboboto of TeaM Energy Philippines last July 31 (Tuesday).

On the OA between PEMC and IEMOP, Juan noted this is set to be concretized within this month – and due for implementation starting September 26 this year.

“Right now we’ve already subjected the initial draft to market participants’ discussion and it was also presented during our last market participants’ meeting and the public was given the opportunity to submit their comments,” he said.

Juan noted that industry inputs and clarifications have been raised to them, hence, the next step for both entities will be “to sit down with the Department of Energy as well as with the Energy Regulatory Commission because some of these requests for clarification might require some guidance from our regulator and also from the DOE.”

These particular issues, he said, deal with those on the central registration body (CRB) for participants in the retail electricity market; as well as the envisioned registrar for the Renewable Energy (RE) market.

He said it remains a question for now whether those are functions to be performed by the IEMOP or PEMC – considering the previous delegation institutionalized then by DOE and ERC Rules.

On staffing for both companies, Juan indicated that IEMOP will beef up its human resources with 147 people; while PEMC will have 67 on its team.

“We would need to already process and finalize our transfer of employees from PEMC to IEMOP and those employees that will remain with PEMC, they’d already have to execute the contracts of employment,” the IEMOP chief executive said.

He further explained “for us to do that, we would also need to separate them from PEMC and notify the Department of Labor and Employment, so we’re allotting 30 days for that.”

In terms of settlement of liabilities and collection of market fees, Juan emphasized that such will likely be a function devolved to IEMOP – but prior to concretizing that system, they will also be securing regulatory nod.

“On liabilities including that of the existing loan with PSALM (Power Sector Assets and Liabilities Management Corporation) that was used to purchase the existing system that we’re using for PEMC… since the idea is for the market operator to assume the asset, it will also take over the liabilities,” Juan stressed.

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