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‘Sweetheart deal:’ Company with P7k capital runs wholesale electricity spot market – Nograles

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House energy committee vice chair Jericho Nograles can’t hide his disbelief that a supposed small-time company with only P7,000 paid up capital is actually running in the wholesale electricity spot market.

Nograles, representative of party-list Pwersa ng Bayaning Atleta, made the revelation as he questioned how and why the Independent Electricity Market Operator of the Philippines Inc., (IEMOP) was able to corner the contract to manage the Wholesale Electricity Spot Market (WESM) without any competitive selection process.

Nograles stressed that inquiry over the matter must be conducted as soon as possible since for every kilowatt hour that you pay for your electricity, “at least 50 centavos” are automatically collected IEMOP—a company with a declared capital of only P7,000 and dubiously set up only back in May 2018.

“A capitalization of P7,000 is not even enough to buy a food cart franchise, what more to manage the wholesale electricity spot market?” said Nograles.

Nograles said IEMOP “managed to run its operation with a measly capitalization by taking over hundreds of millions of pesos worth of government-funded IT assets.”

“Laway lang ang puhunan… Ginigisa ang mga electric users at tayong lahat sa sariling mantika,” he added.

In a recent briefing of the House Committee on Energy, Nograles questioned IEMOP on their qualifications and required both IEMOP and Philippine Electricity Market Corporation (PEMC) to submit relevant documents to Congress.

He noted that from the documents submitted, “it turns out that IEMOP has no experience, and worse, no assets to serve as the the operator of the Wholesale Spot Electricity Market.”

Nograles said the House energy panel under Marinduque Rep. Lord Allan Velasco should take a deeper look into this issue.

Documents obtained by Nograles and Velasco’s panel revealed that IEMOP incorporated itself on May 15,2018 and in with each of seven incorporators “contributing P1,000 as paid up.”capital.

IEMOP describes itself as a “non-stock, non-profit organization” which was incorporated “to become the Independent Market Operator of the Wholesale Electricity Spot Market (WESM).

Only four months after its incorporation, IEMOP entered into an Operating Agreement with PEMC to take over its role to manage WESM.

Nograles said that while it is true that the EPIRA lLw has mandated the creation of an independent operator for WESM, “there should have a been a competitive selection process to determine which company is most competent and best equipped to run and manage WESM.”

“The sweetheart deal made it possible for IEMOP to grow from P7,000 capitalization to become a multi-million outfit with a total declared income of more than P100 Million for the end of 2018. This will need a lot of explaining,” said Nograles.

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