State-run Philippine Electricity Market Corporation (PEMC) and Independent Electricity Market Operator of the Philippines (IEMOP) have sealed an Operating Agreement (OA) to finalize the transfer of operations for the Wholesale Electricity Spot Market (WESM).
The OA is the legal document that confirms IEMOP as the new and legal managing body of market operations for the country’s electricity spot market.
The agreement was made between PEMC Chairman Noel V. Aboboto with President Oscar E. Ala, including IEMOP Chairman Ralph A. Villanueva and President Francis Saturnino C. Juan.
Under the new agreement, PEMC will remain as governing body and oversee the compliance of market participants. It will also assess rule changes and other policy implementations so that abuses can be prevented in the WESM.
Meanwhile, IEMOP will run the operations of the electricity market and manage the registration processes of its participants.
IEMOP will also “receive generation offers (from power facilities), come out with market prices and dispatch schedules of the generation plants, and handle billing, settlement and collections.”
In a joint statement, Aboboto said that such a shift in management will “further the development of the electricity market and to ultimately fulfill the legal mandate of the IMO (independent market operator) transition.”
Villanueva added that they are “prepared to assume and deliver on the promise of establishing a competitive, efficient, transparent and reliable market for electricity.”
The Philippine WESM is already behind other markets, which are now reaching larger households in their trade of power commodity. Other markets have also expanded their service tools and options for consumers.
Republic Act No. 9136 mandates that the PEMC will transfer its functions, assets, and liabilities to a separate entity to ensure its independence from market participants.
Energy Secretary Alfonso Cusi in Febuary approved of the transition plan calling for the formation of an independent market operator and the transfer of the market operation functions to it.