WESM fines 2 more power producers

by Alena Mae S. Flores, February 13, 2015
from Manila Standard Today

LAOAG CITY, Ilocos Norte—Philippine Electricity Market Corp. has imposed penalties against two more companies for breaches in the “must-offer” rule of the Wholesale Electricity Spot Market.

The PEMC board confirmed the fines against two power plants of state-owned Power Sector Assets and Liabilities Management Corp. and Panasia Energy Inc. owned by Millennium Energy Inc. for failing to make an offer in November and December of 2013.

PEMC, operator of the WESM, was directed by the Energy Regulatory Commission to conduct investigations on possible violations of the “Must Run” and “Must-Offer” rules of the WESM, the country’s trading floor for electricity.

PEMC said in a January report the board denied the appeal PSALM’s 140-megawatt Casecnan hydro power plant in Nueva Ecija and the 650-MW Malaya thermal power plant in Rizal.

“Ours is really focused on breach in the WESM rules. It’s up to them whether they bring it to the ERC or the courts. Participants have the right to do that,” PEMC president Melinda Ocampo told reporters.

Ocampo said the decision of the companies to withhold capacities or not make an offer likely resulted in higher power rates at the WESM in November and December 2013.

PEMC said PSALM requested for reconsideration of the penalties but the PEMC board in December approved the issuance of the penalty against the two plants.

PEMC, meanwhile, imposed penalties against Panasia Energy for the 620-MW Limay power plant in Bataan for violating the must-offer rule.

PEMC cited 10 companies for violating the must-offer rule.

PEMC earlier slapped a P239-million fine against Therma Mobile Inc. owned by Aboitiz Group for the same violation.

Other companies found in violation of the WESM rules but were not issued penalties were CIP II Power Corp. owned by Trans-Asia Oil and Energy Development Corp., Trans-Asia Power Generation Corp., Udenna Management and Resources Corp., Strategic Power Development Corp., SEM-Calaca Power Corp. and  Aboitiz Power Corp. unit AP Renewables Inc.

All WESM participants are required to offer their capacities under the must-offer rule.

Ocampo said PEMC only investigates breaches of the WESM rules and and not  instances of anti-competitive behavior. Such authority is vested with the ERC pursuant to Republic Act No. 9136, or the Electric Power Industry Reform Act.

“When it comes to PEMC our concern is only breaches in WESM rules. When it comes to anti-competitive rules, this is for ERC to find out. It’s beyond [our] jurisdiction,” Ocampo said.

The Energy Department reported to the Supreme Court last year that around 1,546 MW to 2,703 MW of capacities were not offered in the market in November 13, 2013 alone.

“The capacities not offered range from 2,078 MW [10 a.m.] to 3,148 MW [2 a.m.]. This explains the reason for the high prices because there is significant capacities not offered during the period [December 5]. At the sample period, 8 a.m., the capacities not offered [are] 2,393 MW,” it said.

The report noted there were six times when the offered prices were cleared at P62 per kWh, all of them at off-peak hours.