Work together, not fight

There’s something strange going on here. Last Feb. 20, I wrote about how some people were questioning how the creation of the Independent Electricity Market Operator of the Philippines (IEMOP) supposedly didn’t follow the procedures of the law. And I wrote to explain why this is not so.

As I pointed out, it is only the implementing rules of the Electric Power Industry Reform Act or Epira — not the law — that required that the independent market operator (IMO) be run by an organization that had run a similar market one year after the Wholesale Electricity Spot Market (WESM) operates, with minimum of two years of running a similar market. WESM started its operation in 2006, and in 2007 there was no one in the Philippines that qualified. Hence, upon consultation with the Department of Justice, electric power industry participants, and the Joint Congressional Power Committee, the Department of Energy promulgated a department circular to create an independent market operator.

The Department Circular required the IMO to be incorporated as a private corporation under the Corporation Code of the Philippines to operate the WESM on a fully independent, nonprofit basis. So it operates only on actual, audited costs; therefore, it makes no money for possible misuse. The level of this transaction fee has to be approved by the Energy Regulatory Commission (ERC). Currently, it is less than one centavo per kWh. And it is manned by Filipino market operators who have been doing it since 2006. So why would you want to close it down?

Clearly the laws and subsequent promulgations were followed in transitioning to an independent market operator. IEMOP was created with a transition Board so it could be got up and running. Now that’s its proven itself, there will be a stockholders meeting later this month to finalize its creation in the way intended. It further directed that no electric power industry participant could hold any interest, whether directly or indirectly, in the IMO. The IMO transition plan was endorsed by the Department of Energy and the electric power industry participants on Feb. 6, 2018, as required by Epira; on May 15, 2018, it was incorporated. All staff were independent. Since September 2018, WESM has been successfully run by IEMOP with no complaints.

On top of that, Al Cusi is being accused of plunder. I wonder where on earth that came from? I know Cusi; he refused to even take the per diem due him from attending PEMC Board meetings. It was he who insisted that PEMC become independent, and that market operations be transferred from PEMC where it had been placed to a truly independent operator (the PEMC Board includes representatives of generator, distributors, and the transmission company). And that it be nonstock, nonprofit—so what could he plunder?

Most importantly: IEMOP has proven its ability to do the job, so what would those questioning its creation replace it with? The only option they would have is a company with a foreign strategic partner. Would that company be willing to operate on a nonprofit basis? Do we want the Philippine electricity market run by a foreign entity?

There are three essentials to our living through COVID-19: food, water, electricity. Food is getting to most people after some early glitches. Water has been stable thanks to the concessionaires, with 24/7 in the NCR. And we’ve had no brownouts. There have been complaints of how Meralco has calculated monthly billings, which shows that people get quite upset when electricity prices are high, even by just a few centavos. If IEMOP were closed down, it would create havoc in the market, and prices would go all over the place. The stabilizer of prices is IEMOP — by managing the auction on the WESM, it sets what distributors will pay, and hence you.

I think COVID-19 has taught us we all need to work more closely and collaboratively with each other — not fight each other. I’d like to suggest that those who don’t like IEMOP and how it was created sit down with Cusi, the PEMC and IEMOP boards, and other interested individuals to come up with the best solutions for all. Is that asking too much? Let’s get together.

Our economy and society are in enough disarray today. So the last thing we want to do is to add to it. We need to maintain what we have in the most consistent and stable manner we can.

Email: wallace_likeitis@wbf.ph