The Philippine Electricity Market Corporation (PEMC) is set to oversee the governance of the Reserve Market despite facing significant budget deficits.
The Reserve Market, launched in January 2024, is crucial for ensuring fair and transparent transactions within the Wholesale Electricity Spot Market (WESM).
The Department of Energy (DOE) has mandated PEMC to enhance its compliance and market monitoring functions through Department Circular (DC) No. DC2024-06-0019. This directive includes amendments to the WESM rules and the creation of a manual on Ancillary Services Monitoring, focusing on Reserve Market compliance and related enforcement actions.
Following a suspension of settlement amounts by the Energy Regulatory Commission (ERC) in April, the Reserve Market is expected to resume operations in the third quarter of 2024.
During its Annual General Membership Meeting (AGMM) last month, PEMC disclosed a financial report showing an excess of expenses over revenue amounting to over PHP 90 million.
As a non-stock, non-profit organization, PEMC plans to file an application with the ERC to approve supplemental market fees to fund necessary capital expansion. This expansion is critical to support the monitoring of the Reserve Market, which will require additional manpower and equipment.
The current share of PHP 200 million in approved annual market fees for 2023 is insufficient to cover these expanded operational costs.
PEMC has been operating at a deficit due to delays in the approval of market fees, caused by backlogs and reinstated fees based on previous years’ ERC approvals.
PEMC’s governance of the WESM is integral to maintaining stable electricity prices in the Philippines. It provides the ERC with a regulatory framework to support the governance of the electricity market.
Despite financial challenges, PEMC continues to play a vital role in ensuring the stability and transparency of electricity market transactions.
