Published June 30, 2018, 10:00 PM By Myrna M.
Velasco
The newly institutionalized
Independent Electricity Market Operator of the Philippines (IEMOP) will need to
enter into an agreement with the Philippine Electricity Market Corporation
(PEMC) and relevant banks on the transfer as well as management of security
deposits of trading participants at the Wholesale Electricity Spot Market
(WESM).
With predecessor-firm PEMC in
particular, which has also been restructured to become the WESM’s governing
body, IEMOP President Francis Saturnino Juan noted that the handling of the
market security deposits would be part of the Operating Agreement (OA) that the
two companies will be firming up and signing soon.
“On security deposits, for the
existing that have been posted in favor of PEMC, we’re thinking of letting them
remain until expiration – subject to agreement with PEMC and the banks,” he said.
As explained, before a power
generator could officially trade its capacity; and for a distribution utility
to procure supply from the spot market, they are required to remit prescribed
amount of security deposit through the market operator.
That security deposit will then be
the ‘financial cover’ that the market operator can lean on if the power
generator or the DU defaults on payments for or settlements of WESM-transacted
capacities.
Aside from security deposit, Juan
indicated that the OA with PEMC shall also sort out concerns such as market fee
collections and filing with the Energy Regulatory Commission (ERC); treatment
of the liabilities that have been there prior to the creation of the IEMOP; as
well as delineation of functions following its segregation from the sanctioned
governing body, among others.
“Once the IEMOP assumes market
operation functions, it will start collecting market fees. Portion of the
proceeds will be remitted to PEMC to defray its cost of operations,” Juan said,
contending that “this will be provided in the Operating Agreement.”
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