The National Power Corporation (Napocor) and the Power Sector Assets and Liabilities Management Corporation (PSALM) recently signed an Operations and Management Agreement (OMA).

The agreement paves the way for the future role of Napocor after all of the power generation facilities under its ownership in the main grids have been privatized.

NPC said that the OMA is a duly signed document that explains, outlines, describes and establishes the relationship between National Power and PSALM, as a result of the former’s privatization by the latter, as provided for by the Electric Power Industry Reform Act (EPIRA).

“We wish to assure our employees, and the general public, that the signing of this document will not in any way change the quality of service that we provide nor will it adversely affect our employees welfare,” NPC said in a statement.

The OMA details the relationship, sets each agency’s obligations and responsibilities to each other, and points the direction to which Napocor will be going, after all its generation assets have been privatized.

“More importantly, the OMA recognizes and acknowledges the value of National Power and its employees, primarily as one of the recognized leaders and pioneers in the power industry, and the capacity of its human resource, its expertise in the fields of power plant operations, and engineering, among others,” the statement said.

Even before the EPIRA was signed into law, the crafters of this legislation has already visualized an OMA as early as 1998, when the possibility of what was then the Omnibus Electricity Reform Bill, will be passed.

Like the EPIRA, the OMA version then underwent changes, adapting as it is to conditions in play within the market, until it was signed.

“It is not an employment contract which will give PSALM supervision and control over National Power employees. What the OMA provides are performance standards by which the output of National Power, as an O&M company, will be evaluated,” NPC said.

The OMA is based and mandated by specific provisions in the EPIRA, including Sec. 49 of EPIRA and Rule 21, Sec. 1 of IRR; Section 55 (a) and (e), Rule 21, Section 11(a) of the EPIRA IRR, Section 47 (j) and Section 5(q), Rule 21 of the EPIRA IRR.

“The agreement, however, will still be subject to further review by the Department of Finance and Department of Energy. An Oversight Committee is being created to monitor the implementation of the OMA,” said the Napocor.