Businessll,firror
l! uorrary, r"rruary 10, 2o2o
Solons probe spot market operator's
accord with PEMC for irregularities
BY [,ENIE LECTURA
U @llectut a
AWMAKERS are looking
into the irregularities
within the Independent
Electricity Market Op-
erator of the Philippines (Iemop),
operator of the Wholesale Elec-
tricity Spot Market (WESM).
Rep. Jericho Nograles of Pu-
wersa ng Bayaning Atleta Party-
list, also the vice chairman of th-e
House Energy Committee, ques-
tioned Iemop's role and the operat-
ingagreement with the Philippine
Electricity Market Corp. (PEMC).
PEMC used to be the WESM
operator.
"Looking at tbe operating
ag(eement between Iemop and
PEMC, I find it highly irregular
that the incorporators are also
the signatoriesfof the operating
agreement]," Nograles said at a
recent House hearing.
He said the selectiod for an
Independent Market Operator
(IMO) to manage the:WESM
was conducted without any
competitive selection process.
Moreover, Iemop grew "from a
P7,000 capita lization to become
a multimillion-peso outfit with
a total declared income of more
than P100 million for the end
of 2018."
Nueva Ejica Rep. RosannaVer-
gara said Congress should have
been involved in the creation of
the lemop, and should have un-
dergone public bidding.
"Do a public bidding, trans-
parent and accountable, so that
the Filipino consumers know
that there is no such thing as lu-
\ PAgg; - &zl
tong macao [the local lingo for a
crooked deall happening in our
industry," Vergara said.
Vergara observed the conflict
of interest inirolving Iemop Presi-
dent and Chief Executive Officer
Richard Nethercott, who was ap-
pointed at the start of the year.
Nethercott admitted during
the hearing that he is married
to an assistant secretary of the
Departmgnt ofEnergy (DOE), but
claimed that there is no conflict
of interest, saying a legal opin-
ion from Iemop was sought on
the matter.
He also admitted that National
Transmission Corp. President
Melvin Matibag was also mar-
rigd to one of the incorporators
of Iemop, but has since resigned.
However, Vergara, said the
relationships cast doubts on
Iemop's independence and could
violation of the RA 3019, or
be in
the anti-graft law. "The indepen-
dence is already subject to ques-
tion, whatever you san" Vergara
told Nethercott.
The DOE, PEMC and Iemop
earlier said that the latter was
created by virtue of the enact-
ment of DOE Department Circu-
lar 2018 01-0002 dated January
17,2020, and, consequently, the
IMO Transition Plan, which are
based on Section 30 of the Elec
tric Power Industry Reform Act
(Epira), which were jointly ap-
proved bylthe DOE and the Elec-
tric Power Participants.
AIso, the DOE said a competi-
tive biddingwas required only for
foreign participants as an option
under the Epira if the lMO was
created in 2007.