Hearings vs power companies set in Q1

by Alena Mae S. Flores – February 15, 2016 at 11:10 pm

from Manila Standard

The Energy Regulatory Commission is set to start the hearings against 12 companies for alleged anti-competitive behavior within the first quarter of the year.

ERC’s investigating unit filed complaints in June last year against 12 companies for anti-competitive market behavior that led to price spikes during the Malampaya maintenance shutdown in November to December 2013.

“We want to emphasize that this is actually priority for us. So the cases will be prioritized over all other cases, we know the public is now awaiting our resolution with respect to this issue,” ERC chairman Jose Vicente Salazar told reporters.

The 12 companies are Power Sector Assets and Liabilities Management Corp. (for Malaya and Casecnan plants); Therma Mobile Inc.; Manila Electric Co., 1590 Energy; CIP II Power Corp; Trans-Asia Power Generation Corp.; AP Renewables Inc.; Udenna Management Resources Corp; Strategic Power Development; GN Power Mariveles and SEM-Calaca Power Corp.

“I guess we have to already move on whether there is liability on the part of the respondents, whether we already say they are not liable at all. We will definitely start before end of the quarter,” Salazar said, adding the agency wanted to wrap up the investigation before the end of the year.

Commissioner Gloria Victoria Yap-Taruc said the commission was still “grappling with scheduling” due to other pending priority cases.

“We are also doing our independent study. We are taking a look at possible structures to be able to move forward,” she said.

She said the rules of the ERC allowed the application of methods under the rules of court.

“We’re seriously considering a board, or a tribunal, composed of only three or a hearing officer. We’re seriously studying what the constitutive body will be,” Yap-Taruc said.

The cases filed against the 12 companies for anti-competitive behavior at the Wholesale Electricity Spot Market was the result of the report of the investigating unit that was completed after more than a year.

The Electric Power Industry Reform Act of 2001 said “no participant in the electricity industry or any other person may engage in any anti-competitive behavior including, but not limited to, cross-subsidization, price or market manipulation, or other unfair trade practices detrimental to the encouragement and protection of contestable markets.”

The Malampaya shutdown caused a spike in power rates for December 2013 and January 2014, prompting non-government groups and other petitioners to file a temporary restraining order at the Supreme Court.

The SC ruled in favor of the petitioners and stopped the implementation of the P4.15 per kilowatt-hour increase in power rates for the month of December.

The Malampaya shutdown coupled with the scheduled and unscheduled shutdown of several power plants caused the sudden spike at the WESM, the country’s trading floor of electricity.

Meralco’s power rates rose P4.15 per kWh for December 2013 and P5.30 per kWh increase for January 2014, inclusive of other charges such as system loss, taxes and transmission costs.

Meralco, however, was unable to pass on to consumers the P4.15 per kWh increase in power rates in December due to a temporary Supreme Court restraining order still in effect until today.

The P5.30 per kWh rate increase for January, however, was recalculated as a result of the decision of the ERC to void the WESM charges for the November and December billing months.