January 28, 2016 By Lenie Lectura
ABOITIZ Power Corp. is
willing to continue negotiations with Philippine Electricity Market Corp.
(PEMC) to resolve their dispute following a Court of Appeals (CA) decision that
junked the market operator’s appeal to impose a P235-million fine against an
AboitizPower subsidiary.
“We are pleased with the CA decision
and will dialogue more with PEMC to reach a satisfactory settlement,” AboitizPower
President Antonio Moraza said when sought for comment.
On Thursday, AboitizPower said in a
disclosure to the stock exchange that it received the CA decision dated
December 14, 2015, denying PEMC’s petition for review assailing the April
1, 2015, decision of Branch 157 of the Regional Trial Court (RTC) in Pasig
City.
The RTC Branch 157 in Pasig
City issued a writ of preliminary injunction preventing PEMC from
collecting from Therma Mobile Inc. the amount of P234.9 million in financial
penalties. The CA’s upheld the local court’s decision.
The CA also prevented PEMC from
charging interest on the financial penalties. Likewise, the appellate
court prevented PEMC from transmitting its investigation report to the
Energy Regulatory Commission (ERC), until the dispute is finally resolved
through the dispute resolution process of the Wholesale Electricity Spot Market
Rules and Dispute Resolution Market Manual.
In the same order, the court
made a prima facie determination of the existence of an arbitration agreement
between TMO and PEMC, and ordered the parties to continue with the dispute
resolution process embodied in the WESM Rules and WESM DRMM.
Aboitiz said negotiation meetings
conducted by the parties have already commenced.
When sought for comment, PEMC said
it “will endeavor to release a statement tomorrow (Friday) after our
board meeting.”
Early last year, PEMC said TMO
withheld capacity during the November and December 2013 supply period and
imposed financial penalties.
TMO argued that it did not withhold
any capacity, as it was physically impossible for TMO to transmit more than
100megawatts (MW) to the Manila Electric Company.
Although TMO’s rated capacity is 234
MW, it could only safely, reliably and consistently deliver 100MW during the
period under investigation because of the thermal limitations of its
transmission lines and the technical and mechanical constraints of its
generating units, the company said.
Aside from TMO, PEMC also imposed
penalties against the Power Sector Assets and Liabilities Management Corp.
(PSALM) and Panasia Energy, Inc. for the same reasons.
In its report, PEMC said PSALM’s
violation covers the 140MW Casecnan hydro plant and 650MW Malaya thermal power
plant. PEMC imposed a total of P89-million penalty against the state firm.
Panasia Energy, which operates the
620-MW Limay power plant in Bataan, was also fined by PEMC for violating the
must-offer rule. Panasia is owned by Millennium Energy Inc.
Under the must-offer rule,
generation companies registered in the WESM must declare and offer the maximum
generating capacities of their power facilities in the spot market.
Aside from PSALM, TMO and PANASIA,
there were other power producers that violated the WESM rule but penalties were
not meted out against them.
These are AP Renewables, Inc.
(APRI); CIP II Power Corp.; Trans-Asia Power Generation Corp. (TAPGC); Udenna
Management and Resources Corp.; Strategic Power Development Corp.; and
SEM-Calaca Power Corp.
PEMC, according to its President
Melinda Ocampo, only investigates breaches of the WESM rules. Any act of
anti-competitive behavior is under the jurisdiction of the ERC.
“When it comes to PEMC our concern
is only breaches in WESM rules. When it comes to anti-competitive rules, this
is for ERC to find out. It’s beyond [our] jurisdiction,” Ocampo said.
The Supreme Court earlier ordered
the ERC to investigate anti-competitive behavior and abuse of market power
allegedly committed by some WESM participants. As such, PEMC conducted the
investigations under the “must-run” and “must-offer” rules of the WESM.
