Senate energy panel chairman cool to PEMC transformation into IMO

by Lenie LecturaOctober 20, 2016

from Business Mirror

The chairman of the Senate Committee on Energy said on Thursday there is no need to rush the implementation of a provision of the Electric Power Industry Reform Act (Epira) of 2001 that seeks to transform the Philippine Electricity Market Corp. (PEMC) into an independent market operator (IMO).

“I think there’s no sense of urgency for them [PEMC] to become [an] IMO. It’s functioning the way it is right now.  Kaya gusto lang natin maging IMO is para walang interference [Noninterference precedes the need for an IMO transformation],” according Sen. Sherwin T. Gatchalian.

Under Epira, PEMC is supposed to last for only one year, and would transition into an IMO. So far, PEMC  has existed for 12 years now.

PEMC is the operator of the Wholesale Electricity Spot Market (WESM), the country’s trading floor for electricity.

“I think we have time to evaluate that. I have to look at it closely, but my sense there is there’s no rush to look at that,” Gatchalian added.

The Department of Energy (DOE) earlier issued a draft circular that sets the guidelines for the transition.

The transfer of the WESM to the IMO is also meant to dispel concerns of continuing government intervention at the WESM.

Currently, 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.

The PEMC Board is chaired by the DOE secretary until its transition into an IMO.

Based on the draft circular, the composition of the seven-member IMO Board includes an economist, academician, finance expert, lawyer, engineer, governance member and the president of the IMO.

The economist shall hold office for one year; the academician and lawyer member for two years; the finance member for three years;  and the engineer and governance member for four years,

The current PEMC president shall carry over to be the IMO president for one year to ensure smooth transition. The president shall be selected every two years.

The economist has to have a five-year experience in a management position related to financial or spot markets, while the academic has to have a doctorate degree and has held a two-year senior academic position in a college or university related to economics or science.

The finance person, meanwhile, has to have more than five years’ experience in senior management position in trading in a financial market.

The lawyer should be a senior partner in a law firm of a size of a 15 or more lawyers, or who has held a position as a government lawyer and who has engaged in litigation and appealed in trial courts.

The engineer has to have an expertise in the operation of the transmission or generation systems for more than two years at a senior management level, and has more than 10 years’ experience working in an energy-related field.

The governance members has to have a directorship position in a publicly listed company or a private corporation with a size over 50 full-time workers.

The president, on the other hand, should have a minimum of five  years’  experience in the electric-power industry.