The Philippine Electricity Market Corp. (PEMC) has will begin the transition plan for the creation of the independent market operator (IMO) that will take over the wholesale electricity spot market (WESM) by the second quarter this year.
“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,” DOE Secretary and PEMC chairman Alfonso Cusi said.
The IMO will be incorporated as a non-profit company that is independent of government and industry participants.
The transition will begin with a meeting between PEMC and market participants on February 6 for the constitution of its membership.
PEMC will still be the governing body of the spot market with the board of directors consisting of participant representatives and independent members.
By the second quarter, PEMC and IMO will forge an operational agreement to formalize the turnover of the use of the Market Management System (MMS) and other trading platforms as well as the transfer of market operations functions.
It will also complete the personnel placement and employment for the two companies by June.
Meanwhile, PEMC will hold a special PEM board meeting to finalize and approve the amendments to PEMC articles of incorporation and by-laws, and to select the IMO company incorporators and initial board members based on the submissions of the PEM Board and PEMC Transition Committee.
The PEMC was incorporated in 2003 and was assigned to the autonomous group market operator that will oversee market governance and do the functions of a market operator in the WESM – which is established under the Electric Power Industry Reform Act.
However, under the EPIRA, WESM must be transferred to an IMO a year after establishment.