Nasecore asks PEMC abolition

Under the Electric Power Industry Reform Act, PEMC was organized by the DoE as the ‘market operator’

A consumer group is pressing the Department of Energy (DoE) to abolish power bourse administrator Philippine Electricity Market Corporation (PEMC) since an independent market operator has already been established.

In a letter dated 19 July, the National Association of Electricity Consumers for Reforms Inc. (Nasecore) told Department of

Energy (DoE) Secretary Alfonso Cusi that PEMC “became functus officio and should have been dissolved.”

Under the Electric Power Industry Reform Act, PEMC was organized by the DoE as the “market operator.” It was constituted and created to undertake preparatory work and initial operation of the Wholesale Electricity Spot Market (WESM.)”

With the WESM commencing its commercial operations on 26 June 2006, the law mandated that an independent entity, which is now the Independent Electricity Market Operator (IEMOP), should be formed.

“Such transfer of the functions, assets, and liabilities to IEMOP left effectively nothing with PEMC, the market operator which consequently became functus officio should have been dissolved,” Nasecore said.

The group noted that the “reported continued existence of PEMC as governing body is a clear violation” of Rule 9, Section 7 (d) of the IRR, which stated that PEMC should only govern the WESM “until the formation or selection of IMO.”

“Thus, for PEMC to continue as the governing body for the WESM is without any legal basis and accordingly, it has no right to continue receiving funds coming from the ERC-approved market fees which should all go to the newly-formed IMO,” Nasecore said.

The group noted that the ‘reported continued existence of PEMC as governing body is a clear violation’ of Rule 9, Section 7 (d) of the IRR.

“It is for this reason that we respectfully request DoE to immediately correct this wrong by issuing a directive stripping the PEMC Board of its residual governing function that is violative of the law,” the group added.

Nasecore also underscored that the DoE should ask the Commission on Audit to conduct a special audit of the books and accounts of PEMC before the transfer of its functions, assets, and liabilities so that PEMC can be cleared of any financial liabilities and the new IMO can start a clean slate.

Meanwhile, IEMOP should be registered by the DoE to the Governance Commission for GOCCs so that the salaries of its directors and officers can be immediately subjected to the Salary Standardization Act.

The Daily Tribune has sought comments from the DoE and PEMC regarding the request of the Nasecore but they have yet to reply as of press time.