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PEMC-Iemop deal null andvoid
from the start, lawmaker insists
RY LF.NTE [.EcruRA
t @llectuta
UWERSAng BayaningAtle-
ta (PBA) Party-list Rep. Jer-
icho Nograles on Wednes-
-day urged the Department of
Energy (DoE) to declare null
and void the contract between
the Philippine Electricity Mar-
ket Co(poration (PEMC) and the
Independent Electricity Market
Operator.of the Philippines Inc.
(Iemop) because the dealwas not
approved by President Duterte.
In a statement, Nograles said
the contract is "void ab initio" or
invalid from the very beginning.
He said PEMC must seek the en-
dorsement of the Governance
Commission for Government-
Owned or -Controlled Corpora-
tions (GCG) and thereafter seek
final approval from the President.
PEMC used to be the operator
of the Wholesale Electricity Spot
Market (WESM) before Iemop
took over. PEMC remains the gov-
erning arm of WESM.
According to Nograles, PEMC's
claimed transition from being a
GOCC to a fully privatized com-
rhursdav, Febru arv
pany was "no( proper and not
legally-binding" because this was
not approved by the President.
Nograles said PEMC has nei-
ther the recommendation of
the Governance Commission
of GOCCs nor the approval of
the President, qhus making the
PEMC-lemop contract void from
the very beginning.
"The continued collegtion of
market fees from consumers is
illegal because the contratt is il-
legal. I sincerely believe fhat the
President was blindsided that
something this massive hap
pened.Ifthe President knew that
this is going to happen, he would
have affixed his signature to
privatize PEMC. PEMC was never
privatized. The President does
not know that this happened,"
Nograles said.
PEMC used to collect about
one centavo fot every kilowatt-
hour (kWh) from the consumers'
monthly electric bill. The Energy
RegulatoryCommission (ERC) au-
thorizedthis in 2014. But IemopP,
now the operator of WESM, has
yet to secure a similar approval
from the ERC.
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"So, who approved this deal?
Congress will get to the bottom
this. In the last two committee
hearings, I think Congress has
enough evidence and j n forma-
tion to declare the contract void
ab initio," Nograles said, adding
that the identity of "the persons
behind this illegal contract is
something we have yet to estab
lish and I intend to pursue this
to the end."
. Nograles noted that the deal,
which allowed a 7.000 peso-com-
pany like Iemop P to take over
and use PEMC's P781-million
computer equipment for free and
automatically deduct at least .84
centavos pe kWh from electric-
ity consumers, is anomalous and
could be the basis of filing mul-
tiple cases against its officials.
'A typical household Lhat con-
sumes about 200kWh pays lemop
around P2 per month. Multiplythat
by the millions of households and
Iemop collects overabillionpesos a
year. This is veryalarmingbecause
lemop does not evenhave any ERC
approval to do so," Nograles said.
''We see a variety of Repub-
Iic Acts violated in this cortupt
deal. For the next Committee on
Energy hearing, we will invite the
Energy Regulatory Commission,
the Philippine Competition Com-
mission, and again the Gover-
nance C,ommission for GOCCs as
the regulatory agencies thathave
been bypassed by PEMC. There
is clear corruption in this power
scam," Nograles added.
Nograles said that since all
transactions involving IEMOP as
an independent market operator
are questionable, the DOE should
declare the contract null andvoid.
The DOE, PEMC and lemop,
for their parts, earlier said that
the latter was created by virtue
of the enactment of DOE De-
partment Circular 2018-01-0002
dated January 17, 2020 and con-
sequently the IMO Transition
Plan, which are based on Section
30 of the Electric Power Industry
Reform Act (Epira), which wele
jointly approved by the DOE and
the Electric Power Participants.
Also, the DOE said a competi-
tive biddingwas required only for
foreign participantr as an option
under the Epira if the IMO was
created in 2007.