The Philippine Electricity Market Corporation (PEMC)—the operator of the Wholesale Electricity Spot Market (WESM) that imposed exorbitant power rates—should be abolished.
Rep. Edgardo Masongsong of the 1st Consumers Alliance for Rural Energy, Inc. (1-CARE) party-list made the call on Monday in light of the findings of the Energy Regulatory Commission (ERC) that the WESM price during the shutdown of Malampaya natural gas plant during November to December last year were exorbitant because at least 36 power generating companies violated the Must Offer Rule of the law by withholding their power supply.
“PEMC should be dissolved as it has proven to be ineffective, inefficient and grossly incompetent. PEMC should have first had information on the trading behaviors of the participants and the possible violations being on the ground. It should be the very first to raise the issue to the ERC, not the other way around,” Masongsong pointed out.
The high WESM price, which reached a peak of P62 per kilowatt hour, was one of the reasons cited by power distribution firm Manila Electric Company (Meralco) in pushing for a P4.15 power rate hike—the highest in Philippine history.
The proposed Meralco hike, however, was stopped by the Supreme Court via a Temporary Restraining Order.
“PEMC has been negligent its duties as market operator because it failed to determine discrepancies in trading practices in accordance to the WESM rules, or either failed to or may have chosen to play dumb on suspected incidents of anti-competitive behavior of the power players,” Masongsong argued.
“It unacceptably failed to assure transparency and order in the trading of electricity,” Masongsong added.
The PEMC, with the Secretary of the Department of Energy as Interim Chairman is composed of 14 members mostly coming from profit-oriented business corporations involved in power generation, transmission and distribution.
Based on the PEMC website, some of its members include: Meralco Vice President for Energy Management Nixon Hao; Aboitiz, Senior Vice President for Power Marketing and Sales of SN Aboitiz Power Luis Miguel Aboitiz; Power Sector Assets and Liabilities Management Corp. President Emmanuel Ledesma, Jr.; National Power Corporation President Gladys Cruz-Sta. Rita; Angeles Power, Inc. President Peter Nepomuceno, Senior Vice President Legal, Regulatory and Power Marketing of First Gen CorporationVictor Emmanuel Santos and H&WB Corporation President Antonio Agbayani Ver.
With PEMC’s composition, Masongsong underscored that it should be replaced by an Independent Market Operator (IMO).
“PEMC is far from being independent. We cannot expect them to correct market abuses in contravention to their own business and personal interests,” Masongsong said in closing.
The shift to IMO requires the recommendation of the Energy department and the approval of the Joint Congressional Power Commission. LLANESCA T. PANTI