Published December 18, 2017, 10:00
PM By Myrna
M. Velasco
The current functions of the
Philippine Electricity Market Corporation (PEMC) will already split into two
with the targeted incursion of the new independent market operator (IMO) of the
Wholesale Electricity Spot Market (WESM) early part of next year.
In an interview with lawyer Francis
Saturnino Juan, chief operating officer of the PEMC transition committee,
PEMC’s functions will have to be demarcated as to its ‘governance’ domain, and
the other half of it will be transferred to the WESM-IMO.
The IMO firm that will take over the
market operations function at WESM, initially contemplated to be named as WESM
Market Operator (WMO), will be registered as a new corporation with the
Securities and Exchange Commission (SEC) between this month until the early
part of 2018.
For the IMO, the units and
departments that shall be placed under it will be that of the: ‘registration’
which is currently under PEMC’s Corporate Planning Department; then the trading
operations and its information technology (IT) support and systems; as well as
billings and settlement management.
For the governance role that will
remain with PEMC, Juan noted that this covers the Enforcement and Compliance
Office (ECO), the Market Assessment Group (MAG) as well as the various
committees that shall be supporting the PEM Board on its oversight and pursuit
of market rules changes as needed for the electricity spot market’s operations
and further developments.
On eventual ownership of existing
assets, Juan noted that these will remain with PEMC but they will just come up
with a “usufructuary deal” as well as an Operating Agreement (OA) with the IMO
firm on the co-use of facilities and market systems. “In terms of ownership of
the current assets, our proposal is for these assets to remain in ownership
with PEMC, but with the IMO being allowed to use them, our arrangement will be
usufructuary,” he reiterated.
On the incorporation plan for the
proposed IMO entity, Juan explained that “when we looked at the law (Electric
Power Industry Reform Act), the IRR (implementing rules and regulations) and
the WESM Rules, we actually are able to infer the explicit mandate for them to be
two entities – one is the governance body, and the other is the market
operator.”
He emphasized that there are
“different units within PEMC right now, and we were able to identify which
units or departments are actually doing governance works for PEMC and as
governing body; and what are the departments or units doing the market
operations work.”
On the governance role of PEMC, Juan
noted that there are no immediate contemplated changes because their initial
concentration is the establishment of the IMO firm.
“PEMC will remain to be the
governing body, it will perform the governance functions as enumerated also in
the WESM Rules through the PEM Board. We are not recommending any changes yet
in the composition, what we want to do as much as possible is adhere to the
current wordings, the language of the WESM Rules,” he stressed.
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