Wednesday, May 3, 2017

DOE recommendations all set for WESM’s IMO transition plan

Published April 27, 2017, 10:01 PM By Myrna M. Velasco

Recommendations are inching close to enforcement of the planned independent market operator (IMO) transition for the Wholesale Electricity Spot Market – starting with some changes at the management level of operator firm Philippine Electricity Market Corporation.

For the first time, Energy Secretary Alfonso G. Cusi squarely addressed media questions on the hurdles that they had to go through relative to forward plans for the operational set-up of the electricity spot market.

He said the IMO transition team would still be government-led and will eventually metamorphose into fully private sector-driven market operator.

He cannot say for now when is the exact timeframe for this, but he indicated that they are now carefully evaluating the critical component of WESM’s human resource – such as those on the information technology, data management, trading and other important technical bit of market operations – being the primary constituency that have to be retained in the workforce.

In the audit that the department had undertaken for the WESM, Cusi disclosed that they had to pore over PEMC’s operating expenses, fundamentally when it comes to the allocation of collected market fees.

The energy chief explained such had been an essential and decisive element of the audit process “because it has impact on the consumers, so we had to seriously look into how the market fees were spent and allocated for.”

Based on their findings, he noted that about half of the market fees went to salaries and compensation of the employees, but what they allegedly established as ‘exorbitant’ had been the level of compensation that the management had given themselves.

When asked on the actual figures, Cusi just tipped off “they’re in the millions of pesos…so I cannot tolerate that, that practice has to change,” emphasizing that the only way to end that practice is to effect re-alignments at the management level.

He was similarly quizzed on the IMO transition team that will take PEMC’s leadership, but Cusi opted to keep things under the radar for now, saying in jest that “the recommendation of the audit team is still on my table… I can’t remember the names written there.”

Cusi admitted though that it was not an easy pursuit looking at the detailed financial statements of PEMC “because of the protective order that the management has issued to its finance department.”

But the DOE secretary asserted that being the chair of the PEM Board, he had to tug his way into it so they can have a solid basis on why changes has to be enforced in the market’s management and operations.

Beyond the use of the market fees, the energy chief further hinted that other sources of WESM income are also being probed – including the supposedly millions of training fees and payments on data requests.

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