The Energy Regulatory Commission has tapped Reyes Tacandong & Co. to audit Philippine Electricity Market Corp., operator of the wholesale electricity spot market.
“We have already completed the bidding process for the procurement of an external auditor to conduct the market audit of PEMC,” ERC chairman Jose Vicente Salazar told reporters.
ERC’s move followed the request of Senator Sergio Osmeña, chairman of the Senate committee on energy, for a conduct of audit on PEMC’s operations.
ERC commissioner Alfredo Non said the audit was supposed to be a “reasonableness test or audit of PEMC” and it would be conducted by Reyes Tacandong .
The audit will cover PEMC operations between 2006 and 2014.
“The procedures that would have to be done were drawn up by the auditors and that has been discussed with PEMC and that was agreed upon also, so Reyes Tacandong can now start the audit,” Non said.
Non said the audit would look at how PEMC used market fees during the period under review.
“Basically if you look at reasonableness objective, the question is reasonableness in relation to what? So it could be reasonable in relation to the budget. Should it be reasonable in relation to the industry, or the operator, or reasonable in relation to the expectation or what they expected or what their objectives are,” the commissioner said.
Non said the results of the audit would help ERC in terms of looking at the proposed budget of PEMC.
PEMC files its annual petition for approval of its market regulation fees with the ERC. PEMC operates WESM, the country’s trading floor of electricity.
PEMC sought approval for a 2016 proposed budget of P1.067 billion, with an estimated market fee rate of P0.0156 per kilowatt-hour.
“From our perspective, it is a private corporation. The chair happens to be the Energy Secretary. But since it is an entity imbued with public interest, that’s why ERC can regulate it. DoE has a stake in it in terms of determining whether they are in compliance with certain policies,” Salazar said earlier.