Electricity spot market operations now in private hands

A private sector-run spot market for electricity was firmed up as state-entity Philippine Electricity Market Corp. (PEMC) executed an agreement with the Independent Electricity Market Operator of the Philippines Inc. (IEMOP) to formalize the transfer of all its functions, assets and liabilities.

IEMOP is a nonstock, nonprofit corporation, led by a board of directors comprised entirely of independents, “who do not have any interest or connection to the WESM participants.”

Effective Sept. 26, IEMOP will run the wholesale electricity sport market (WESM) and, among other things, manage the registration of market participants, receive generation offers, come out with market prices and dispatch schedules of the generation plants and handle billing, settlement and collections.

PEMC will remain as governing body for WESM to monitor market participants’ compliance with the market rules, following the policy and regulatory oversight of the Department of Energy (DOE) and the Energy Regulatory Commission (ERC).

In a joint statement, PEMC chair Noel Aboboto said both PEMC and IEMOP were taking steps “to further the development of the electricity market and to ultimately fulfill the legal mandate” for the transition to an independent market operator.

“IEMOP is prepared to assume and deliver on the promise of establishing a competitive, efficient, transparent and reliable market for electricity,” IEMOP chair Ralph Villanueva said. “We are ready and committed to propel the electricity market to new heights of success.”

In July, the ERC awarded to Makati-based Potomac Economics Ltd. (PE Software Analytics) a contract for technical assistance in the creation of market analysis framework for the surveillance and monitoring of the WESM.

The ERC said the engagement with Potomac would ensure abuse of market power or anticompetitive behavior would be adequately addressed.