ERC’s new team to revisit collusion case

by Myrna Velasco
from Manila Bulletin, 18 December 2015

A new team that will include seconded contingent from the Office of the Solicitor General (OSG) will revisit the findings of the investigation unit of the Energy Regulatory Commission (ERC) on the collusion case thrown against the power generators and Manila Electric Company (Meralco) during the November-December, 2013 distressful rate hikes in the power industry.

This was indicated to the media by ERC Chairman Jose Vicente B. Salazar, although he qualified that the OSG lawyers are still undergoing training and also at the process of studying the intricate system and network of the restructured electricity sector.

By his assessment, the re-organized team may be able to conclude their review and validation of findings by the middle of next year.

“The way I see it, the administrative component on the violations of anti-competitive behavior will wind up middle of next year,” Salazar said.

While the designated solicitors to the team may have been equipped legally, Salazar admitted that “they lack the capacity in terms of understanding the industry.”

It has to be noted that the “lack of industry understanding” of an energy official during that time was the very cause of the “collusion allegation” tossed versus the generation companies and Meralco.

It was being predicated then on the fact that many of them implemented simultaneous shutdowns of their power plants for maintenance.

The GENCOs, however, noted that it actually stemmed from ‘failed planning’ of the Department of Energy (DOE) on the scheduling of plant shutdowns because of the two elections that happened that year.

Many of them moved their scheduled maintenance of power facilities toward the end of the year because of the “repair and plant downtime prohibitions” during the May and October, 2013 elections.

And the industry’s dilemma had been compounded by forced outages of many plants; plus the lack of preparations of the Power Sector Assets and Liabilities Management Corporation (PSALM) on the operation of its Malaya plant which could have provided security capacity to the Luzon grid.

The power generators also complained on the lack of regulators’ uptake on the Water Protocol that hurdled many of them to offer capacities based on the water use call of the National Water Resources Board.

Some plants also have ancillary services commitment to the National Grid Corporation of the Philippines (NGCP) on fraction of their capacities and that similarly hobbled them from nominating their capacity as “energy” in the gross pool-designed spot market.