THE Energy Regulatory Commission (ERC) has started scouting for a firm to conduct an independent audit of the country’s spot power market operator.
“Our bids and awards committee already published the request for expression of interest and the process is now ongoing for the procurement of an auditing firm, which will now conduct the audit on PEMC,” ERC chairman Jose Vicente Salazar said.
Philippine Electricity Market Corp. (PEMC) operates the Wholesale Electricity Spot Market (WESM).
The independent audit will be conducted along with that of SGV & Co., the PEMC’s external auditor.
The regulator’s move is in response to a call by Senator Sergio Osmeña 3rd, who said an independent audit was necessary as PEMC is not covered by the Commission on Audit.
PEMC includes representatives from the Energy department and power sector players.
“From our perspective, it is a private corporation. The chair happens to be the Energy secretary. But since it is an entity imbued with public interest, that’s why ERC can regulate it, [and the]DOE (Department of Energy) has a stake in it in terms of determining whether they are in compliance with certain policies,” Salazar noted.
He pointed out that the audit would be a step in determining additional initiatives that have to be taken with respect to market regulation.
“If we determine if we should undertake additional initiatives to make us more effective in regulation, then we will have to do that,” Salazar said.
The PEMC audit, he also said, is a prelude to the firm’s becoming an independent market operator (IMO).
Under the Electric Power Industry Reform Act of 2001, the WESM must be transferred to an independent entity or IMO one year after its establishment. PEMC has been operating the market since 2006.
So far, Salazar said, “PEMC is doing very well. Based on [the]audit reported to us, I was told that everything is okay.”
He added that PEMC’s annual budget had been submitted to the ERC for approval and that there was no reported problems with regard to the disbursement of funds.
“[W]e know what exactly is happening in their financial side,” Salazar said.