PIPPA welcomes Reyes' vow to pursue IMO appointment

MANILA, Philippines - The Philippine Independent Power Producers Association (PIPPA) has welcomed Energy Secretary Angelo Reyes’ commitment to pursue the appointment of an independent market operator (IMO) for the Wholesale Electricity Spot Market (WESM).

“We in PIPPA are happy to find out that Secretary Reyes has realized the need to organize the IMO,” PIPPA president, Ernesto Pantangco said.

Pantangco also urged the DOE to be more transparent on the timeline of the IMO as this concerns all the power industry players.

“We hope the good secretary will also share with us the specific timetable that the Department of Energy (DOE) will follow in appointing an IMO at the earliest possible time,” Pantangco added.

Under the Electric Power Industry Reform Act (EPIRA) of 2001, the independent entity or IMO should have been appointed one year after WESM’s implementation. The WESM was formed and became operational in 2007.

WESM provides a mechanism for buying and selling electricity, whether these transactions are covered or not by bilateral contracts.

Pending the appointment of an IMO, an autonomous group market operator (AGMO) serves as WESM’s interim market operator. Right now, the board of the Philippine Electricity Market Corp. (PEMC) also acts as the AGMO. But eventually, all the assets and liabilities, as well as functions of the AGMO, will be transferred to the IMO under a competitive bidding process.

Under the law, the IMO should hold the financial and technical capability to run WESM. The IMO must also have a proven track record of not less than two years as a leading market operator of a similar- or larger-sized electricity market.

On the reconstitution of the PEMC board, Pantangco urged the DOE to restudy PIPPA’s proposal, giving the private power generation sector an additional representation in the PEMC board. The PEMC board is the entity tasked to oversee the operations of the WESM.

“Right now the private power generation sector keeps only two seats in PEMC’s board,” Pantangco noted. “An additional representation for the private power generation sector will further support the spirit of the law (EPIRA), which recognizes the critical role of the private sector in ensuring an efficient and independent WESM.”