Wednesday, February 15, 2017

PEMC board asked for ‘courtesy resignations’

08 February 2017

The board of directors of the operator-firm of the Wholesale Electricity Spot Market (WESM) had been asked to submit “courtesy resignations” during a meeting convened by Energy Secretary Alfonso G. Cusi last week
There had been no clear indications yet on the intent of the “resignations request” from the Philippine Electricity Market Corp. (PEMC) Board, but some sources in the industry noted that it would be up to the players in the sector “to read what the stars might be hinting.”

No confirmations so far on queries if this is a precursor of planned overhaul of the WESM operating firm’s leadership. The only apparent thing, at this stage, is that preparations are ongoing for the WESM’s shift into having an independent market operator (IMO), already a long-delayed process for the deregulated electricity sector.

It was gathered that Philippine Electricity Market Corporation (PEMC) President Melinda L. Ocampo, who is also a member of the PEM Board, had already tendered her “courtesy resignation”, but no action had been taken on it so far.

Apart from transfer of the spot market to a fully private-led operator, it was emphasized that the IMO engagement would also set some clarity on the legal personality of the entity operating the WESM.

The past administration had categorized PEMC as government-owned and controlled corporation (GOCC), but this is being fiercely questioned by the company noting that it has not been taking its budget from the State coffers – instead, it is a self-sustaining entity on its operations via collected market fees from WESM trading participants as approved by the industry regulator.

The appointment of an IMO for the WESM should have been done as early as 2007 or a year after the establishment of the spot market.

But previous discussions on the plan failed because the board memberships being scouted from the various disciplines then may not necessarily have expertise in electricity spot market operations – which is crucial in ascertaining operational dilemmas as well as other problems that may strain the entire industry.

Earlier proposals had been to set up selection committee for the IMO Board that shall comprise mainly of government representatives. But that was viewed by the industry to be in contrast with the objectives of fully privatizing the operational set-up of the spot market.

Under Cusi’s leadership at the Department of Energy, however, hopes are high that this phase of the industry’s long-awaited reform process would finally be accomplished – and it is now just a question of how things would be carried out.

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