The board of Philippine Electricity Market Corp. approved the transition plan to create an independent market operator for the Wholesale Electricity Spot Market.
PEMC, chaired by Energy Secretary Alfonso Cusi, operates the country’s trading floor for electricity.
As prescribed in the Electric Power Industry Reform Act of 2001, the IMO should take over the management and operation of the WESM from PEMC.
“In light of this development, the IMO will be incorporated as a non-profit company which is independent of the government and industry participants,” PEMC said in a statement.
PEMC will remain the governing body of the spot market with board of directors composed of participant representatives and independent members.
“By the second quarter of 2018, PEMC and the IMO shall enter into an operational agreement to formalize turnover of the use of the Market Management System and other trading platforms as well as the transfer of market operations functions. Alongside these milestones, personnel placement and employment for the two companies will be completed in June,” PEMC said.
Cusi stressed to the PEMC board the importance of implementing the IMO transition within a specified timeline.
“This has been long overdue; it has been delayed for more than a decade. Now is the best time to usher in its independence as provided in the law,” Cusi said.
Cusi earlier vowed to put in place the IMO for the WESM by June.
“By June 2018, you will see an independent market operator and you will see an independent PEMC without DOE,” Cusi said.
PEMC said a special meeting among market participants would be held on February 6 to constitute the PEMC membership as part of the transition process.
A special PEM board meeting will also be held to finalize and approve the amendments to PEMC’s articles of incorporation and by-laws.
The selection of IMO company incorporators and initial board members will be made based on the submissions of the PEM board and the PEMC transition committee.
PEMC has been operating the WESM since June 2006.
The WESM began commercial operations in Luzon in June 2006 and in the Visayas in December 2010.