By Danessa Rivera (The
Philippine Star) | Updated February 6, 2018 - 12:00am
MANILA, Philippines — The Department
of Energy (DOE) has released the guidelines for the establishment of the
independent market operator (IMO) of the electricity spot market.
The agency has issued Department
Circular DC2018-01-0002, titled “Adopting Policies for the Effective and
Efficient Transition to the IMO” for the wholesale electricity spot market
(WESM).
Under the circular, the DOE and the
Energy Regulatory Commission (ERC) will ensure fair competition and the
promotion of public interest as envisioned in the Electric Power Industry
Reform Act (EPIRA).
DOE Secretary Alfonso Cusi said the
WESM and IMO would be consistent with the wisdom of EPIRA to ensure quality,
reliable, secure, affordable and reasonable prices and electricity supply
through a transparent, free and competitive power market.
“WESM is an added option for the
electricity sources of our consumers, especially addressing the stability and
efficiency of power supply,” he said.
The DOE said the IMO policy outlines
the mandates of the DOE and the ERC over the operator, its guiding principles,
its composition, including the board of at least five members, its functions
and WESM’s new governing and governance structure and the conditions for
transition.
In particular, the issuance will
provide guidelines on the procedures to establish the merit order dispatch
instructions and determine the market-clearing price for each time period.
It will also direct administration
of the market, including criteria for admission to and termination from the
market which includes security or performance bond requirements, voting rights
of the participants, surveillance and assurance of compliance of the
participants with the rules and the formation of the WESM governing body.
Lastly, the policy will prescribe
guidelines for the market operation in system emergencies as well as amending
the rules.
“This policy on IMO will ensure full
public accountability to safeguard, foremost, our energy consumers,” Cusi said.
The Philippine Electricity Market
Corp. (PEMC), which currently operates WESM, has formalized the transition plan
for the creation of an IMO to take over the operations of the spot market by
the second quarter of the year.
Under the approved transition plan,
the IMO will be incorporated as a non-profit company which is independent of
government and industry participants.
Meanwhile, PEMC shall remain as the
governing body of the spot market with its board of directors composed of
participant representatives and independent members.
Cusi earlier said the long-delayed
IMO would start operating WESM by June this year.
PEMC was incorporated in 2003 and
was constituted as the autonomous group market operator to oversee market
governance and perform the functions of the market operator in the WESM, which
was created under EPIRA.
But under EPIRA, the WESM must be
transferred to an IMO one year after its establishment.
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