ERC set to hear power market abuse case

by Riza Olchondra
from Philippine Daily Inquirer, 18 December 2015

THE ENERGY Regulatory Commission (ERC) is moving ahead with hearings on a controversial power rate hike that riled up power consumers in December 2013.

“Middle of next year, it would be done,” ERC Commissioner Jose Vicente B. Salazar told reporters.

Wholesale Electricity Spot Market (WESM) prices surged during the supply months of November and December 2013 amid tight supply. This prompted Manila Electric Co. to pass on the higher generation charges, leading to record increases in overall power rates.

Various groups complained against the Meralco price hike before the Supreme Court, which issued a temporary restraining order on the P4.15 per kilowatt-hour (kWh) hike that was supposed to have been collected in December 2013. There was another P5.33/kWh that was supposed to have been imposed in January 2014 but Meralco voluntarily deferred it.

In its ruling, the SC ordered the ERC to investigate anti-competitive behavior and abuse of market power allegedly committed by some WESM participants.

Salazar said lawyers under the Office of the Solicitor General have been provided training to be able to act as prosecutors in the case.

“So that the prosecution would be independent, we appointed it to solicitors. They will present evidence, not the OGCS (Office of the General Counsel & Secretariat),” Salazar said.

The parties have already been provided with copies of the inquiry and they were also given the opportunity to submit their respective answers.

The existing report submitted by the ERC’s Investigating Unit (ERC-IU) to commissioners was basically the same as the report disclosed by the energy spot market operator, Philippine Electricity Market Corp. (PEMC). The ERC has said the report showed there was enough evidence to proceed with a hearing.

The only thing new with the ERC-IU report that was not in the PEMC report was the involvement of Manila Electric Co. (Meralco) in terms of its power supply deal with Aboitiz-led Therma Mobile Inc. (TMO).

Thirteen power plant companies, including those owned or led by big industry players, face complaints of anti-competitive behavior before the ERC.

In a report, the ERC-IU said 13 energy generation companies or power stations withheld energy capacity during a period of tight electricity supply in 2013. This contributed to a record spike in power rates in late 2013.

However, the ERC-IU report did not directly say whether there was collusion among the players—an issue that is still expected to be tackled.