A lawmaker on Thursday asked the Energy Department to invalidate the contract between Philippine Electricity Market Corp. and Independent Electricity Market Operator of the Philippines Inc., saying “it is void ab initio” or invalid from the beginning.
Puwersa ng Bayaning Atleta Party-list Rep. Jericho Nograles said in a statement PEMC’s claimed transition from being a government-owned and controlled corporation into a fully privatized company which would have allowed the transfer of its assets to IEMOP was not proper and not legally-binding because this was not approved by President Rodrigo Duterte.
PEMC transferred to IEMOP, through an operating agreement, the operation of Wholesale Electricity Spot Market on Sept. 26, 2018. PEMC currently supervises the WESM.
Nograles said that during the House energy committee meeting, the Governance Commission for Government Owned or Controlled Corporations confirmed that PEMC needed to go through a process to become a private entity in accordance with Republic Act No. 101149.
He said to become a private entity, PEMC should seek the endorsement of GCG to the president.
“The continued collection of market fees from consumers is illegal because the contract is illegal,” Nograles said, adding that President Duterte might not have been aware of the matter.
He said the PEMC-IEMOP deal which allowed IEMOP to collect from consumers is also illegal because this was not approved by the Energy Regulatory Commission.
Nueva Ejica Rep. Rosanna Vergara earlier said Congress should have been involved in the creation of the IEMOP.
Vergara said a public hearing should have been held to ensure transparency.
She also questioned the background of newly-appointed IEMOP president and chief executive Richard Nethercott who admitted during the recent committee on energy hearing that he is married to an assistant secretary of the Energy Department.
Nethercott also said National Transmission Corp. president Melvin Matibag was also married to one of the incorporators of IEMOP, but she resigned.
Vergara said the said relationships put into question the independence of IEMOP and could be in violation of the Republic Act No. 3019 or the Anti-Graft Law.
PEMC earlier assured that the transfer of the WESM operations to IEMOP went through consultations, studies, and relevant approvals.
PEMC officials also 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.