Timelines set in tapping ‘independent operator’ for WESM
By second quarter of 2018, a twostep process will finally propel major shift in the operations of the Wholesale Electricity Spot Market (WESM) as the government is already targeting to turn over the day-to-day run of the power spot market to an independent market operator (IMO).
This has been referenced on the timeline set forth in the 37-page IMO Transition Plan that was submitted by the transition committee of the Philippine Electricity Market Corporation (PEMC) to Energy Secretary Alfonso G. Cusi.
The first phase of the IMO engagement work will delve with legal documentation and approvals and such shall be accomplished in the first quarter of 2018; while phase two will take on the actual assumption of the IMO firm that will take on the “market operator function” that was previously under PEMC’s charge.
At legal documentation and approvals, the “to do list” will cover the incorporation of the IMO company; and following that step will be a formal organization of that particular entity in terms of management and staffing as well as on building up its market-run systems and processes.
This shall also involve approval of the amendments of the Articles of Incorporation and By-Laws of PEMC that shall be “consistent with the approved transition plan.”
Further, according to the draft IMO plan, the changeover process will require “approval of the amendments of the WESM Rules and market manuals consistent with the plan.”
Other concerns, such as taxation rulings or issuances would likewise need to be resolved prior to the engagement of the IMO.
In the second phase when the IMO will already assume its function in the spot market, it shall execute an operating agreement with PEMC that will set the lever for “the actual transfer of PEMC’s functions, personnel and use of market systems and other assets.”
“Subject to the requirements set in this plan, the IMO that shall be formed shall assume the functions of the Market Operator from PEMC,” it was emphasized.
PEMC will continue as a legally constituted entity, but its role will just already be limited to “monitoring and supervision” of the spot market via the PEM Board, of which directors will be chosen independently.
“PEMC shall remain to be the governance arm of the WESM. It shall perform this function through its board of directors, the PEM Board and the WESM governance committees and its organic units,” it was noted further.