Energy Secretary Alfonso Cusi is eyeing the Philippine Stock Exchange as the new operator of the Wholesale Electricity Spot Market to make it truly independent.
Cusi made the statement amid the ongoing review of the operations of the Independent Electricity Market Operator of the Philippines and Philippine Electricity Market Corp., the governing body of WESM.
“First, their operations should really be independent. IEMOP is a mere contractor of PEMC. If IEMOP fails in its performance, we can give it to others. We can give it to PSE,” Cusi said.
The PSE, the only stock exchange in the country, proposed to operate the WESM two years ago.
The Energy Department issued a circular creating a special task force to assess the performance of the WESM under the governance of PEMC and IEMOP in March.
“DOE deems it necessary to assess the performance of the WESM under the current regime to ensure transparency, competitiveness, protection of public interest and integrity of the WESM,” the circular stated.
The department said that under the Electric Power Industry Reform Act of 2001, it is mandated to supervise the restructuring of the electric power industry.
“As the government agency authorized to design the market and its governance, the market structure provided under DC2018-01-0002 is subject to continuing evaluation and assessment of the DoE to determine whether the said arrangement is still relevant to the implementation of the IMO,” the circular said.
The task force will conduct an assessment on the performance of the WESM, the country’s trading floor of electricity under the current structure of its operations.
The task force will also assess PEMC as the governance arm of the WESM, evaluate the performance of IEMOP and review the overall performance of the WESM.
IEMOP took over the operations of the WESM in September last year. It is a non-stock, non-profit corporation governed by a professional board of directors composed of individuals not affiliated with any of the electric companies that trade in the WESM.
Cusi earlier said that while PEMC and the IMO were independent of the government, the department would continue to maintain oversight of the WESM operations.
“The DoE’s involvement with the WESM needs to be close enough for the department to understand key developments while keeping enough distance from the market’s daily functions. The Energy Department will remain the ultimate guardian of WESM rules and manuals. Together with the ERC, we will protect our consumers against industry breaches and anti-competitive behavior,” Cusi said.