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House to ask ERC officials over IEMOP’s fee collections

The House of Representatives will summon officials of the Energy Regulatory Commission to shed light on the ability of Independent Electricity Market Operator of the Philippines to collect market fees from the Wholesale Electricity Spot Market, the country’s trading floor of electricity.

Nueva Ecija Rep. Rosanna Vergara, a member of the House energy committee, said in a radio interview the ERC officials would be asked to attend the next hearing to explain how IEMOP was able to collect market fees.

“How are they able to collect? IEMOP applied in January 2019 [with the ERC]. I don’t know if this has been acted upon or approved,” Vergara said.

Vergara said if Philippine Electricity Market Corp., the former WESM operator, was allowed to collect the fees during its term, it could not just transfer the authority to IEMOP which is a different entity.

She said the P0.01 per kilowatt-hour collected from consumers could reach millions of pesos a month.

“At the end of the day we want to unburden the consumers,” Vergara said.

Vergara also questioned the independence of IEMOP from the government, raising the relationship between IEMOP president and chief executive Richard Nethercott who is married to an assistant secretary of the Energy Department.  She said another IEMOP official, who has resigned, is also married to National Transmission Corp. president Melvin Matibag.

“For me, you call yourself an independent market operator.  Why do you have a wife who regulates the industry,” she said, adding that the said officials might be engaged in “conflict of interest” and thus could be liable for graft.

Vergara said PEMC, which currently oversees the WESM, should cease to exist after it turned over the operations to IEMOP over the redundancy and additional costs to consumers.

PEMC officials earlier said the cost of operating the market was recovered through market fees collected from the WESM market participants that were approved by the ERC as mandated by the Electric Power Industry Reform Act of 2001.  

Vergara said there was a need to look at the fees collected given that WESM prices go up when demand is high especially during the dry months.

She said the ERC should also explain how IEMOP and PEMC, the former operator of the WESM, spent the market fees.

Topics: House of Representatives , Energy Regulatory Commission , ERC , Independent Electricity Market Operator of the Philippines , IEMOP , Wholesale Electricity Spot Market , WESM
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