Cusi opts for WESM’s independent operator

Published August 28, 2017, 10:01 PM

http://business.mb.com.ph/2017/08/28/cusi-opts-for-wesms-independent-operator/

Instead of placing the operations of the Wholesale Electricity Spot Market (WESM) on an extended guardianship of the government, Energy Secretary Alfonso G. Cusi indicated that he wants that final paradigm shift of finally placing the spot market under the charge of an independent market operator (IMO), a long-delayed reform process for the restructured electricity sector.

The proposed IMO structure had been among the most important mandate he had given the five-man WESM transition team to work on.

“I would push for it, because placing the WESM under IMO is prescribed under the law. The only question now is: what shall be the structure,” he stressed.

When also asked by the media if he in any way takes the option of extending government’s hold on the WESM and if he has his proclivity to a former energy undersecretary leading PEMC, Cusi’s forthright answer was: “no!”; and further asserted that “I want to be very clear, not among those in the transition committee. You might doubt my sincerity and passion to effect change, but I am going to do it.”

Fundamentally, the Electric Power Industry Reform Act (EPIRA) and its implementing rules and regulations (IRR) have been clear on the structure of an autonomously-manned IMO that shall bring the electricity spot market into full maturity phase.

The law does not talk about hybrid government and private set-up, so the first step for the State being the overstaying interim operator would be to let go of politically leaning preferences and for some individuals to give up their “ambitions of relevance and perks” of taking into the presidency of the Philippine Electricity Market Corporation.

IMO push in the past failed primarily because proposals had been anchored more on perpetrating government grips, instead of putting the market into the hands of private sector-led operation and could just have been provided with strong regulations or oversight and market surveillance – a framework that viably worked in other power markets.

To Cusi’s credit, he is sounding off that on his tenure, the IMO phase for WESM will finally happen. But he has some questions that had to be answered in the study outcome of the transition team: such as if there is a need to dissolve PEMC and be replaced by a new entity; the mode of award to the IMO entity and the composition of its board, among others.

“The main question is: what kind of animal this PEMC is?  So, I will wait for the recommendation of the transition team, but they’re still doing audit and all these studies for now,” the energy chief stressed.

On the PEMC presidency, he told reporters there would definitely be a lot of applicants if PEMC presidency will be opened for occupancy.

Nevertheless, he reminded those jockeying for positions that equally important in that decision would be the PEM Board and that his job would just be to ratify their recommendation – and both camps would seriously consider competence and the ‘conflicts of interest’ of individuals eyeing the post.

“For sure, there would be a lot of applicants, and there’s no problem in that. But that will be the decision of the Board, and with PEMC being under the DoE, I will have to ratify it,” Cusi explained.