ERC to flesh out concerns in ‘collusion case’

by Myrna Velasco, 20 August 2015
from Manila Bulletin

Before moving to trial proper in establishing the alleged “must-offer” violations of the power generation companies during the controversial November-December 2013 industry events, the Energy Regulatory Commission (ERC) has indicated that it will flesh out first the “missing middle concerns” in the case, primarily the Water Protocol for the hydropower plants.

In a briefing with reporters, ERC Commissioner Josefina Patricia M. Asirit has divulged that there is a plea from one party for a round tablediscussion to fully explain the dynamics of the Water Protocol which generally affects the operation and power capacity offers of hydropower plants.

She noted that the discussion will also bring to the table the concerns relating to the regulatory powers of the National Water Resources Board (NWRB), primarily its mandate on the prioritization of water resources’ use, including those at hydro facilities for power generation.

“There’s a request to have roundtable to discuss the Water Protocol…for NWRB to be part of it. On the whole, the hydro plants are raising that it is becoming a challenge for them dealing with the seasonality as well as the orders of the NWRB that they can actually change prioritization from time to time,” she stressed. Asirit added that the hydropower facilities’ commitment for ancillary services to the National Grid Corporation of the Philippines (NGCP) shall also be factored in.

The other concerns that the Commission shall seriously and comprehensively scrutinize in its next rounds of hearing will be the operational and technical challenges that the power plants encountered relating to the allegations of ‘collusion’ in the November-December 2013 price spike hurdles in the market.

The independently-formed Investigation Unit (IU) at the ERC had announced its findings last June that several companies allegedly committed breaches of the must-offer rule of the Wholesale Electricity Spot Market, hence, causing extreme supply tightness which had driven up the power rates. In essence, some sectors branded it as “collusive act” of the GenCos.

Implicated companies include state-run Power Sector Assets and Liabilities Management Corporation (PSALM), Pan-Asia Energy Holdings, Therma-Mobile Inc. (TMO), CIP II Power Corporation, Trans-Asia Power Corporation, 1590 Bauang Private Power; AP Renewables Inc.; GNPower, Strategic Power Development Corporation, Sem-Calaca and Udenna Management Resources Corporation; as well as Manila Electric Company (Meralco) because it has been in-charge of nominating and pricing the offers of its TMO-contracted capacity.

ERC Commissioner Gloria Victoria Yap-Taruc has qualified that the regulatory body will have prior “pre-hearing conference” on the complaint filed by the IU before moving on to pre-trial process. The fresh round of probe o the case is targeted this August 30.

“We will not have pre-trial yet, but we will have pre-hearing conference because we want to manage how we will handle the case,” she stressed.

Yap-Taruc emphasized that the points being considered are “whether or not we will be hearing the case in a consolidated fashion because they stemmed from the same set of facts…or it might be easier to hear the cases individually.”

She qualified though that “at this juncture, we have not really decided among ourselves if we will do it as consolidated or individually. We will talk about that at the pre-hearing conference… including those concerns as to how many representatives will be allowed for each party in the case.”