DOE close to completing performance review of spot market operator

MANILA, Philippines — Energy Secretary Alfonso Cusi expects to complete the review of the first year performance of the wholesale electricity spot market’s independent market operator (IMO) next month.

Cusi said the review would determine whether Independent Electricity Market Operator of the Philippines (IEMOP) would remain as the IMO or the job would be given to another entity.

“IEMOP is a contractor of the Philippine Electricity Market Corp. (PEMC). If IEMOP fails in its performance, we can give it to others, we can give it to the PSE (Philippine Stock Exchange),” he said.

In April, the Department of Energy (DOE) issued a circular forming a task force to assess the performance of the IMO since it took over WESM operations.

The creation of a task force is intended to ensure transparency, competitiveness, and integrity of the spot market.

Once completed, the task force is directed to submit its assessment and recommendation to the Energy Secretary within 45 days of the effectivity of the order.

The review was supposed to be completed by June, but the deadline was extended to September.   “We’re doing the evaluation so we extended it by another three months,” Cusi said.

According to the DOE, the IMO was required to have at least two years experience in running a market similar to WESM, that’s why people under IEMOP are from PEMC.

The country’s electricity spot market was previously operated by PEMC. WESM started independent operations under the IMO when the DOE secretary relinquished his chairmanship in PEMC on June 26, 2018.

The IEMOP then took over the operations of the WESM from the PEMC last Sept. 26 in compliance with the mandate of Republic Act 9136, otherwise known as the Electric Power Industry Reform Act (EPIRA), for the WESM to be run by an IMO.

IEMOP is a non-stock, non-profit corporation governed by a professional board of directors composed of individuals not affiliated with any of the electric companies that trade in the WESM.

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, which was created under the EPIRA.

But under EPIRA, the WESM must be transferred to an IMO one year after its establishment. While PEMC and IMO will be independent from the government, the DOE will maintain oversight of the WESM operations.