Market operator to pay P700-M loan to PSALM
By Myrna M. Velasco – October 28, 2018, 10:00 PM
from Manila Bulletin
The Independent Electricity Market Operator of the Philippines (IEMOP) has cemented a deal with the Power Sector Assets and Liabilities Management Corporation (PSALM) on the payment of initial P700 million worth of loan utilized for the setting up of the Wholesale Electricity Spot Market.
The spot market operator noted that it sealed a memorandum of understanding (MOU) with the state-run firm on its intent to settle the WESM-linked loan.
When the trading platform or the information technology-enabled market management system (MMS) was set up in 2006, this was bankrolled by $40 million (roughly P2.0 billion) loan from the Asian Development Bank (ADB) and the Japan Bank for International Cooperation (JBIC) channeled then through state-run National Power Corporation.
For the balance of the loan for WESM, IEMOP emphasized that it will be settling this plus interests based on the prescription of the Energy Regulatory Commission – and this has been proposed for payment on monthly installments until February 2019.
IEMOP President Francis Saturnino Juan noted that loan payment for the WESM trading platform will boost “PSALM’s efforts to raise revenues to retire the power sector liabilities it has assumed.”
PSALM is the transferee-company of NPC, which in essence is its successor-firm that assumed all of its assets and liabilities, including that of the WESM loan.
Juan added their move is basically a demonstration of “IEMOP Board’s commitment to manage responsibly the funds entrusted to it through market fees paid by the market participants.”
As chronicled by IEMOP, the loan “has remained unpaid even after more than a decade of WESM operations.”
The MMS is fundamentally the IT infrastructure that supports the trading of capacities in the country’s electricity spot market.
The platform generates the market prices from trading participation (mainly the generation companies) and also sets the dispatch schedules of the power plants for each hourly trading interval.
