WESM hunts more GenCos for violations

by Myrna Velasco, 01 March 2015
from Manila Bulletin

Power generation companies, watch out – because the concerned units under the Wholesale Electricity Spot Market (WESM) are continuously on a hunt for market violations.

This was indicated to the media by Energy Secretary Carlos Jericho L. Petilla, emphasizing that more violations have been apprehended as the Enforcement and Compliance Office (ECO) of the spot market has stepped up its monitoring of market breaches.

The board of WESM operator Philippine Electricity Market Corporation (PEMC) has earlier imposed aggregate penalties of P359.7 million to various GenCos which allegedly violate the spot market’s must offer rule.

“This is not the end yet – we still have a lot of investigations ongoing. We’re looking at violations on a per month basis,” he stressed.

He said the penalties for WESM breaches could also go that high – depending on the extent of market violations.

That was following the PEM Board’s decision to lift the previous penalty cap of P3.0 million.

“Before the maximum penalty was just P3.0 million,” but as of December 2013, he said that penalty scheme was modified so market offenses can be minimized if not curtailed.

“If we don’t do this, nobody will take the rules seriously,” the energy chief averred, adding that even in propounded market rules change, some market participants would not recommend anything because they knew that they will not be penalized anyway.

Petilla added that the traditional practice at WESM-ECO had been to probe violations after 2 to 3 years, but he noted that the changes he enforced would be to undertake investigations soon as the breaches happen.

There are also trading participants – such as the Power Sector Assets and Liabilities Management Corporation (PSALM) – which would not even lift a finger to respond to charges being pinned against it.

“PSALM has that penchant not to answer, but now it is panicking. So if you don’t respond, that mean’s you’re guilty,” Petilla said.

He similarly qualified that the recent penalty impositions by the PEM Board had nothing to do with the portended outcome of investigation by the Energy Regulatory Commission (ERC) on the alleged collusive acts of industry players in the November-December 2013 dilemmas of the power industry.

For the penalties to be fetched out of the GenCo’s violations, Petilla noted that the collections will be allotted for information dissemination about WESM fundamentals or in formalizing a program aligned with spot market trading education and licensing.

“I am now pushing for WESM accreditation or licensing  – some sort of educating prospective trading participants about WESM …that’s where we will put the money to be collected from the penalties,” Petilla said.

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