PEMC transition into IMO still in the works after 12 years

By Lenie Lectura – August 23, 2017

from Business Mirror

The transition committee in Philippine Electricity Market Corp. (PEMC) is expected to include in its report to the Department of Energy (DOE) the composition of an independent market operator (IMO).

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

PEMC is a 15-man body led by the secretary of the DOE and composed of representatives from each sector of the electric power industry, as well as independent members.

The transfer of the Wholesale Electricity Spot Market (WESM) to the IMO is meant, among others, to dispel concerns of continuing government intervention at the WESM.

The transition has yet to happen.

Energy Secretary Alfonso G. Cusi said the transition to IMO “will be part of the road map” that the committee is working on. “Does an IMO need to be a GOCC [government-owned and -controlled corporation] or [a] private company. That is part of an ongoing discussion. It is included in the diagnostic process,” Cusi said.

Cusi announced last month the creation of a five-man transition committee in PEMC, effective August 1.

The committee is composed of the following: former Energy Regulatory Commission (ERC) Chairman Oscar E. Ala, as PEMC president; Francis Saturnino Juan, former ERC executive director; Rauf A. Tan, former ERC commissioner; Jose Mari T. Bigornia and concurrent chairman of the National Renewable Energy Board Jose M. Layug.

Aside from Cusi, the PEMC board will be governed by  Ronald Dylan P. Concepcion, Victor Emmanuel B. Santos, Emmanuel V. Rubio, Neeraj Bhat, Deon James, Rolando M. Cagampan, Octavius M. Mendoza, Allan L. Laniba, Noel V. Aboboto, Jesus L. Arranza and Peter L. Wallace.

The committee will assess PEMC’s existing structures, systems and resources and propose a way forward for the WESM to meet the challenges ahead.

A department circular gives the committee seven months from August 1 to complete its tasks while PEMC transforms into an IMO.

“We created a committee for transparency because we want to develop a policy so that we can gain the trust and confidence of investors. In seven months, the committee has to finish its work. I am waiting for its recommendation for the road map and implementation,” Cusi added.

Cusi said the creation of the transition committee is in line with President Duterte’s thrust of ensuring the protection of the Filipino electricity consumers, who are affected by the operation of PEMC and the WESM.

Cusi added the PEMC shall continue to effectively govern the operations of WESM for the benefit of all electricity stakeholders. On the organizational level, Cusi assured the PEMC employees that the PEMC leadership shall continue to improve and advance their welfare as WESM operations continue to evolve.

The PEMC was incorporated in 2003 and was constituted as the autonomous group market operator to oversee market governance and perform the functions of the market operator in the WESM.

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