No ‘sweetheart deal’ with WESM operator, says DOE

The Department of Energy on Tuesday said there was no “sweetheart deal” with Independent Electricity Market Operator of the Philippines Inc. (IEMOP), the private-sector operator of wholesale electricity spot market (WESM).

The DOE was reacting to a news reports quoting Bayaning Atleta party list Rep. Jericho Nograles, who alleged that IEMOP got the contract to run the WESM without going through competitive bidding.

Nograles also alleged that IEMOP collected 50 centavos per kilowatt-hour of electricity consumed, through consumers’ monthly bills.

In September 2018, IEMOP took over the management of the WESM from state-firm Philippine Electricity Market Corp., following the Electric Power Industry Reform Act’s (Epira) provision that the market should be run independently.

In a statement, the DOE said the IEMOP did not go through a competitive selection process as the law required such “only for foreign participants as an option under the Epira if the IMO (independent market operator) was created in 2007.

The IEMOP takeover happened 17 years after the enactment of the law and 12 years after the WESM started commercial operation.

“The DOE opted to create a separate entity composed of Filipinos who have acquired the necessary expertise to operate the WESM and ensure that the market will be managed by Filipinos,” the agency said.

“It is not [a sweetheart deal, and for the engagement of IEMOP] a transition plan was followed in accordance with the law,” the DOE said. “The collection is less than one centavo.”

Also, the DOE denied that IEMOP has no experience in operating the WESM considering that—based on a formal agreement—PEMC let go employees who were the hired by IEMOP. INQ