IEMOP Seeks ERC Nod for PHP1B Market Upgrade

The Independent Electricity Market Operator of the Philippines, Inc. (IEMOP) has filed an application with the Energy Regulatory Commission (ERC) seeking approval to collect PHP 1.01 billion in market fees over four years to fund a major upgrade of the country’s electricity trading infrastructure.

The proposed amount will finance the development and rollout of a new Electricity Market Management System (IEMMS), replacing the aging platform currently powering the Wholesale Electricity Spot Market (WESM), which has been in operation since 2016.

“The MMS has reached the end of its useful life,” IEMOP said in its filing under ERC Case No. 2025-108 RC. “Technological obsolescence and degraded performance have led to market disruptions and higher intervention rates.”

IEMOP warned that the existing system is becoming increasingly vulnerable, with key software components losing third-party support by 2025, resulting in frequent glitches, rising maintenance costs, and heightened cybersecurity risks.

To expedite the project, IEMOP is also requesting provisional authority to begin charging the fees ahead of the ERC’s final decision.

The IEMMS will be co-developed with GE Vernova (formerly GE Power Philippines), with the software contract priced at PHP 576 million.

An additional PHP 328 million will cover hardware procurement and third-party software licenses, while PHP 45 million is earmarked for auxiliary system functions to be developed by Traxion Tech Inc.

A further PHP 60 million will be allocated for third-party software auditing, in compliance with WESM regulations requiring extensive certification and testing for any new market platform.

The upgrade is expected to go live in 2027 and is designed to accommodate future market reforms, including a potential day-ahead electricity market and the integration of more variable renewable energy and battery storage technologies.

“The proposed system aims to improve transparency, operational efficiency, and resilience,” IEMOP stated, emphasizing that the investment will strengthen market functions amid evolving grid dynamics.

Market fees to cover the upgrade will be collected from power generators across Luzon, Visayas, and Mindanao based on the volume of energy and reserves traded in the spot market.

Public hearings on the application are set to begin on July 15, 2025, at the ERC headquarters in Pasig City, with subsequent sessions scheduled across the country’s major island regions.

If approved, the IEMMS project will represent the largest system overhaul in the WESM’s two-decade history, supporting long-term digitalization and energy transition goals in the Philippine power sector.

WESM, launched in 2006, is the country’s centralized electricity trading platform, where power distributors and large consumers buy and sell electricity at dynamic prices based on supply and demand conditions.