IEMOP’s bright year as WESM operator

By Mark Louis F. Ferrolino, Special Features Writer

With its assumption of the operations of the Wholesale Electricity Spot Market (WESM) on Sept. 28, 2018, the Independent Electricity Market Operator of the Philippines (IEMOP) marked its first year with significant milestones and achievements. Despite some challenges, IEMOP was able to effectively carry out its mandate and laid down a good foundation for a bright future for the country’s power industry.

As IEMOP Corporate Communications Manager Eric Niño U. Louis shared in an interview with BusinessWorld, IEMOP’s first year journey was a combination of triumphs and challenges. It also involved the establishment of crucial programs and activities that would set up the rest of its milestones in the future, he said.

A new beginning

IEMOP’s assumption of WESM operations last year embodies the fulfillment of what the Republic Act No. 9136, otherwise known as the Electric Power Industry Reform Act (EPIRA), requires — the transition of WESM operations from its governing body, the Philippine Electricity Market Corporation (PEMC), to an independent market operator (IMO).

As an IMO, IEMOP carries out the mandate to pursue the WESM’s objective to have a transparent, fair, competitive, and reliable market for the trading of electricity throughout the country. It facilitates the registration and participation of generating companies, distribution utilities, directly-connected customers or bulk users, suppliers and contestable customers in the WESM; and manages the metering, billing, settlement and collection of spot trading amounts for the benefit of the market participants.

Moreover, IEMOP determines the hourly schedules of generating units that will supply electricity to the grid, as well as the corresponding spot market prices of electricity.

A progressive year

Although IEMOP has merely been operating WESM for a short span of time, it has accomplished a lot, igniting several initiatives in pursuit of competitive electric power industry.

Exactly a month after taking over the WESM operations, IEMOP was able to pay its loan with the state-run Power Sector Assets and Liabilities Management Corporation (PSALM) that was used for procuring the Market Management System (MMS), or the information technology-enabled trading platform, for the WESM.

In the matter of tax issues besetting the WESM and its participants, IEMOP sought for the Bureau of Internal Revenue (BIR) Rulings. To address various outstanding issues, IEMOP recommended the issuance of revenue memorandum circulars and proposed its designation as withholding agent for expanded withholding tax for WESM transactions.

Meanwhile, to assess the readiness of WESM stakeholders for the implementation of the enhanced WESM design and the commercial operations of the new market systems, the Parallel Operations Program (POP) was launched last April.

In the course of POP, assessment of the results of the scheduling, pricing and settlement processes was performed, as well as the assessment of market operator’s performance.

IEMOP has also been actively involved in strengthening its stakeholder communication and engagement initiatives. It conducts consultation meetings with partner organizations and WESM members, which it called “Kapihan.” This has served as a good platform for IEMOP to share its latest activities as an IMO and discuss updates on market operations and the new market systems. At the same time, it has served as an avenue for the stakeholders to voice out market-related concerns and issues.

Last April, IEMOP also held the first-ever Market Participants Update (MPU), arranged to apprise participants on market outcome, system performance and recent developments as well as to create discourse on relevant policy and operational issues in the WESM.

These engagements are critical for IEMOP to gain feedback from participants and use them to emerge as a more reliable and customer-responsive market operator than ever before.

“We know that the challenges can be addressed by knowing what the actual challenges we are facing, knowing and understanding what our goals are, gauging participants’ satisfaction on current services, and engaging them to obtain feedback on how to improve our processes and systems,” Mr. Louis said.

Moreover, IEMOP has also embarked on some initiatives that contribute to the growth of the country’s education. Last June, for instance, it signed a memorandum of agreement (MOA) with the Philippine Science High School (PSHS) for the Science Immersion Program (SIP) that equip the students with knowledge about the power industry and electricity market.

“We believe that IEMOP’s service is not limited to the industry, it also contributes to the growth of education of the country, at the same time, helping shape the future of our young and brilliant minds,” Mr. Louis said.

And as a testament to IEMOP’s unwavering commitment to uphold the culture of excellence, it has successfully fulfilled the requirements for certification of compliance with ISO 9001:2015 standard and ISO 27001:2013 standard.

A bright future ahead

Despite momentous milestones and achievements it has attained over the past year, IEMOP strives to improve the delivery of its services in the coming years by integrating technologies in its operations.

A significant part of this is the anticipated introduction of the new MMS and the Central Registration and Settlement System (CRSS), an enterprise system that serves as the main platform for the registration, metering and settlement processes of the WESM.

“So, we plan to have a more digital future. To use technology in our transactions, to streamline our processes by using user interfaces, thus, creating efficiency,” Mr. Louis said.

IEMOP, according to Mr. Louis, is also looking to introduce e-learning courses for trainings on its Web site, the development of a mobile application, and the utilization of cloud computing in its data exchanges.

“IEMOP will continue to become a partner of the trading participants and WESM stakeholders in ensuring the realization of EPIRA’s objectives to promote competition in the power industry by operating an independent market operator that pursues transparency, fairness and reliability in our market operations,” Mr. Louis said.

“Together with participants, we know that we will be able to achieve our objectives and we will be able to exceed their expectations. We will continue to strive and work hard to meet all of that — their needs, their requirements, and the EPIRA’s objectives. Of course, we will continue our relationship with the government and the entire power industry,” he added.

Early next year, IEMOP intends to formally operate WESM in Mindanao, which expected to provide the region a fairer and a more competitive electricity market.