The Independent Electricity Market Operator of the Philippines, Inc. (IEMOP) is seeking approval from the Energy Regulatory Commission (ERC) to impose an additional PHP 1.01 billion in market fees over four years to fund a critical upgrade of the country’s electricity trading platform.

The proposed investment will finance the development and deployment of a new Electricity Market Management System (IEMMS), intended to replace the aging infrastructure that powers the Wholesale Electricity Spot Market (WESM). The application, filed under ERC Case No. 2025-108 RC, includes a request for provisional authority to begin charging the fees ahead of a final ruling.

According to IEMOP, the current Market Management System has been in use since 2016 and is facing mounting risks due to outdated hardware and software. Third-party support for key system components has been discontinued or is set to end by 2025, exposing the platform to frequent glitches, escalating maintenance costs, and cybersecurity vulnerabilities.

“The MMS has reached the end of its useful life,” IEMOP stated in its application. “Technological obsolescence and degraded performance have led to market disruptions and higher intervention rates.”

The proposed IEMMS will be developed in collaboration with GE Vernova (formerly GE Power Philippines) under a co-development framework, enabling IEMOP to reduce long-term costs and build internal technical expertise. The software contract with GE is valued at PHP 576 million, while hardware and third-party software for testing and deployment will cost another PHP 328 million. An additional PHP 45 million is allocated for developing peripheral system functions, to be undertaken by Traxion Tech Inc.

A separate PHP 60 million is earmarked for third-party auditing of the new software, in compliance with WESM rules requiring rigorous testing and certification for new market systems.

The new IEMMS is expected to be operational by 2027 and will be designed to support future market enhancements such as the possible rollout of a day-ahead electricity market. It is also intended to accommodate the increasing share of variable renewable energy and battery storage in the power system.

IEMOP said the additional fees would be recovered from power generators in Luzon, Visayas, and Mindanao based on their volume of traded energy and reserves in the WESM.

Hearings for the application are scheduled in July and August across the three major island groups, with the first set for July 15, 2025 at the ERC’s Pasig City headquarters.

If approved, the IEMMS will mark the most significant systems upgrade in WESM’s history and is expected to improve transparency, operational efficiency, and market resilience.

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