On WESM penalties
by Myrna Velasco – January 29, 2016
from Manila Bulletin
A ruling of the Court of Appeals has ordered the parties to go into ‘dispute resolution process’ to sort out an acceptable settlement on the P234.9 million financial penalties slapped by the operator of the Wholesale Electricity Spot Market (WESM) against the Aboitiz Group’s Therma Mobile Inc. (TMO).
In particular, the appellate court’s verdict has “directed the parties to continue with the dispute resolution process under the WESM Rules” and the WESM’s Dispute Resolution Market Manual.
It has to be noted that the CA granted TMO’s bid for preliminary injunction effectively preventing WESM operator Philippine Electricity Market Corporation (PEMC) from demanding or collecting the imposed penalties.
Additionally, PEMC has been disallowed to “charge interest on the financial penalties and having them accrue.”
The operator of the electricity spot market was further barred from transmitting the investigation report of its PEMC- Enforcement and Compliance Office (PEMC-ECO) to the Energy Regulatory Commission “until the dispute between TMO and PEMC is finally resolved.”
As the parties are highly anticipated back to the negotiating table, Aboitiz Power president Antonio R. Moraza has indicated that while they are pleased with the court decision, they “will dialogue more with PEMC to reach a satisfactory settlement.”
There had been no immediate reaction from the WESM operator as the matter was still due for PEM Board discussion on Friday (January 29).
As initially determined by PEMC-ECO’s probe, it alleged that TMO “withheld capacity during the November and December 2013 supply period,” and that prompted it to impose the penalties.
The Aboitiz firm, however, insisted it “did not withhold capacity, as it was physically impossible for (it) to transmit more than 100 megawatts” to its capacity buyer Manila Electric Company (Meralco) due to constraint in the transmission lines on those supply-month duration.