By Myrna M. Velasco – January 9, 2018, 10:00 PM
from Manila Bulletin
The well-anticipated ingress of the Independent Market Operator (IMO) of the Wholesale Electricity Spot Market (WESM) targeted as early as February this year will also prompt the eventual exit of Energy Secretary Alfonso G. Cusi as chairman of the board of the Philippine Electricity Market Corporation (PEMC).
That will similarly signal the end of the government’s grip over the interconnected electricity spot market of Luzon and Visayas grids.
When asked on this matter, PEMC transition committee Chief Operating Officer Francis Saturnino Juan indicated that “it is part of the plan” as presented to industry stakeholders and relative to the IMO Transition Plan submitted to the Department of Energy.
And according to the industry players who have consistently attended all public hearings of the IMO formation for the spot market, the proposed takeover of the Philippine Stock Exchange (PSE) on to manning WESM’s operations had been clarified and definitively communicated to them that it is “not part of the plan” – at least based on the submitted IMO blueprint that was subjected to public consultations.
Government double speak and industry confusion happened though when Cusi made pronouncements to the media that the proposal will be up “for study.”
Under the officially proposed transition plan, it was stated that an IMO company shall be initially incorporated and organized as “a non-stock, non-profit corporation under the Corporation Code of the Philippines.” It will be up to the IMO firm then to have it reconstituted into a for-profit entity as industry circumstances warrant.
It was emphasized that the IMO firm “will be incorporated as a private company, and will have no representation from the government as well as from the electric industry participants.” This is still a process that must be initiated by the DOE and the PEM Board.
Following the incorporation and official entry of the IMO company into the industry’s fold, the next step will be to work on the Market Rules modifications that shall also take into account the re-organization of the PEM Board as governance and oversight body of the power spot market. On taking that step, its board membership will already change to mostly from industry players and selected independent directors.
“The PEM Board members will then be elected in accordance with the WESM Rules as well as the PEMC by-laws and will no longer be appointed by the DOE, the IMO transition plan has set out. The President of the IMO firm will also be its representative to the PEM Board.
With the mandated restructuring of the spot market, it was expounded that “the DOE ceases to have any participation in the PEM Board,” and that “the chairmanship of the Secretary is only intended to be interim in nature.”
The IMO company is targeted for incorporation this month or up to February so it can keep pace with the timelines set forth in the plan. Targets may encounter delays though because the IMO Plan was not tackled in the PEM board meeting last December.