No provision in WESM rules on ‘dispute resolution’ for TMO case

by Myrna Velasco – February 2, 2016

from Manila Bulletin

The rules governing the operations of the Wholesale Electricity Spot Market (WESM) did not provide for dispute resolution of market breaches, hence, the market operator is not inclined to open the negotiating table yet on the case involving Therma Mobile, Inc. (TMO) of the Aboitiz group.

Given this, WESM operator Philippine Electricity Market Corporation (PEMC) said it opted to file a motion for reconsideration on the recent ruling issued by the Court of Appeals.

In that decision, the CA directed the parties to settle their dispute involving the P234.9 million worth of penalties enforced against TMO allegedly for violations of market rules.

PEMC, in its statement to the media though, has noted that “the WESM investigation process of WESM Rules and Market Manuals is not covered by mediation and arbitration.”

It expounded “the WESM Rules is clear that the investigation process is not a commercial transaction and therefore not covered by the term ‘dispute’ that should go mediation and arbitration if a participant disagrees with the results.”

If referenced on the provisions of the Electric Power Industry Reform Act, the WESM operator stressed that “the proper course of action of a participant is to escalate the finding to the Energy Regulatory Commission via an original action.”

In spite of the protracted legal skirmish over the TMO case, however, PEMC president Melinda L. Ocampo indicated that they are “always open to discuss any issue with the participants as long as it is consistent with its mandate under the WESM Rules.”

She added that being the operator of the spot market, they commit to “upholding the integrity of the WESM investigation process”; and that they shall always adhere to “creating a level playing field among the WESM players.”

The Aboitiz firm previously argued that it could not have been held liable with the alleged market breaches of ‘capacity withholding’ because of the technical constraint on the transmission line then for the wheeling of generated electricity from the TMO plant.

The facility is of 234-megawatt installed capacity, but its delivery to off-taker Manila Electric Company on the questioned supply months of November-December 2013 had just been at 100MW due to the indicated transmission line capacity limits.