DOE mulls non-profit setup for WESM operator

Manila Times.net
Published : Monday, October 10, 2011 00:00 Written by : EUAN PAULO C. AÑONUEVO


THE Department of Energy plans to transform the Philippine Electricity Market Corp. into a non-profit institution, junking the present practice of bidding out management of the spot market for electricity to the private sector.


Energy Secretary Jose Rene Almendras said the planned shift will help keep prices at the Wholesale Electricity Spot Market from increasing.


”[The] problem sa private operator sa WESM, tataas yung babayaran ng tao kasi may private operator na kikita dun,” he said.


The WESM has operated in Luzon since 2006 and is a trading platform for electricity between power generators and large-scale customers such as distribution utilities and industries.


Electricity rates at the spot market are volatile, as WESM prices are dictated by market forces as well as weather and power facilities’ physical conditions.


Under the Electric Power Industry Reform Act of 2001, an independent market operator with a proven track record of no less than two years should have been appointed a year after WESM’s implementation.


Pending the selection of an IMO through a competitive bidding process, an autonomous group market operator serves as WESM’s interim operator. The board of state-administered PEMC currently acts as the AGMO.


Almendras said government would rather transform PEMC into a multi-sectoral but independent entity to reduce cost.


”Yung IMO, magiging IMO na sila. Yung structure mo andun pero board mo independent na, hindi na government. May sweldo pero wala nang profit margin, at cost yun, operating cost,” he said.


The PEMC board already agreed to the proposal, which will kick off before the year ends, the DOE chief said.


Power plant operators in the country had been clamoring for the turnover of PEMC’s operations to an IMO to promote transparency at the WESM.


To recall, a number of irregularities at the WESM were uncovered since its inception, such as power generators withholding capacities and trading teams manipulating prices, most of which were blamed on state agencies.