A TRANSITION plan for the creation of an independent market operator (IMO) for electricity trading has been approved by the board of directors of the Philippine Electricity Market Corp. (PEMC).
“This has been long overdue; it has been delayed for more than a decade. Now is the best time to usher in its independence as provided in the law,” Energy Secretary Alfonso G. Cusi said in a statement.
The move is line with Republic Act No. 9136 or the Electric Power Industry Reform Act of 2001 (EPIRA) that calls for the creation of the IMO.
The new entity will take over from PEMC the management and operation of the Wholesale Electricity Spot Market (WESM), the country’s centralized venue for buyers and sellers to trade electricity as a commodity where its prices are based on actual use, or demand, and availability, or supply.
PEMC said: ““In light of this development, the IMO will be incorporated as a non-profit company which is independent of the government and industry participants. On the other hand, PEMC shall remain as the governing body of the spot market with board of directors composed of participant representatives and independent members.”
The creation of the IMO comes after Mr. Cusi in July created a transition committee that will come up with the way forward for WESM after he called for the resignation of PEMC’s previous board members. He gave the committee seven months from Aug. 1, 2017 to complete the task.
PEMC said the activities for the transition include a special meeting among market participants on Feb. 6, 2018 for the constitution of the corporation’s membership. A special board meeting will also be held to finalize and approve the amendments to PEMC articles of incorporation and by-laws.
It said the selection of IMO company incorporators and initial board members will be based on the submissions of the PEM board and the PEMC transition committee.
“By the second quarter of 2018, PEMC and the IMO shall enter into an operational agreement to formalize turnover of the use of the Market Management System (MMS) and other trading platforms as well as the transfer of market operations functions. Alongside these milestones, personnel placement and employment for the two companies will be completed in June,” PEMC said.
WESM has been operated by PEMC since June 2006. Under its rules, the market operator should have been an independent entity after a year of operation. Electricity trading began in Luzon in June 2006 and in the Visayas in December 2010. — Victor V. Saulon