E.R.C. may continue probe till next year of 12 gencos that raised power rates in Dec. 2013

by Lenie Lectura - September 13, 2016

http://www.businessmirror.com.ph/e-r-c-may-continue-probe-till-next-year-of-12-gencos-that-raised-power-rates-in-dec-2013/

THE Energy Regulatory Commission (ERC) may not finish this year the probe involving 12 generation companies (gencos) found to have engaged in anticompetitive behavior that led to record-high increases in power rates in December 2013.

“Mahihirapan siguro,” ERC Commissioner Alfredo Non said. “We can start the hearings in October. The decision, however, I don’t know if we can issue by the end of the year.”

Non said the commission may conduct marathon hearings. However, this is not an assurance that hearings would be finished before the year ends.

“We do not know what will come out of those hearings. Basically, it would involve evidence and evaluation,” he said.

The ERC’s Investigating Unit (IU) released a report in June.

The 12 gencos identified in the report are the Power Sector Assets and Liabilities Management Corp., Pan-Asia Energy Holdings, Therma Mobile (TMO), CIP II Power Corp., Trans-Asia Power Generation Corp., 1590 Bauang, AP Renewables Inc., Udenna Management Resources Corp., Strategic Power Development Corp., GNPower Mariveles Coal Plant Ltd. and SEM-Calaca.

The country’s largest power-distribution utility firm Manila Electric Co. (Meralco) was also found to have committed “market abuse” during the November and December 2013 supply months. Based on the report, Meralco was included because of its agreement with TMO and the manner by which its supply deal with the power producer was carried out.

Upon release of the report, the IU was supposed to file formal complaints against the 12 firms before the commission. But the ERC restarted the probe with prehearing conferences in August last year, following the appointment of ERC Chairman Jose Vicente Salazar, a former justice undersecretary.

The case stemmed from the P4.15-per-kilowatt-hour (kWh) rate hike that Meralco was supposed to collect in December 2013 and the P5.33-per-kWh rate increase supposed to be collected in January 2014. The implementation of this, however, was prevented by the Supreme Court.

Prior to the release of the report conducted by the ERC IU, the Philippine Electricity Market Corp. (PEMC) also identified the same players that breached the Wholesale Electricity Spot Market (WESM) rule on the must offer.

Under the must-offer rule, gencos registered in the WESM must declare and offer the maximum generating capacities of their power facilities in the spot market.

PEMC has transmitted its report to the ERC.

PEMC President Melinda Ocampo said her office 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 anticompetitive rules, this is for ERC to find out. It’s beyond our jurisdiction,” Ocampo said.

The SC earlier ordered the ERC to investigate anticompetitive 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.