13 power players found liable for ‘market abuse’

MANILA (UPDATE) – After waiting for more than a year, the investigating unit of the Energy Regulatory Commission (ERC) found 13 power players liable for market abuse for withholding supply that led to a hefty spike in the spot market.

These players are PSALM, the operator of Malaya and Casecnan plants; Pan-Asia, operator of Limay Power plant; ThermaMobile; Manila Electric Co. (Meralco); 1590Bauang; CIP2; TransAsia; AP Renewables, the operator of Makban Geothermal; Udenna, the operator of Subic diesel plant; Strategic Power Development. Corp, the operator of San Roque; GNPower, the operator of Mariveles coal fired plant; and SEM-Calaca.

ERC executive director Atty. Francis Juan said the investigating unit has filed the case with the commission on Tuesday and the Commission en banc will hear the case.

When asked what happened to the collusion angle, Juan said that was not tackled in the report.

Juan added that the ERC will only determine if there is basis to fine these players, which will range from P50,000 to P50 million for the violation.

According to Juan, any consumer can use the findings of the ERC en banc to file criminal cases in violation of the EPIRA.

When asked why Meralco was also charged, Juan said the utility influenced Therma Mobile to withhold the supply based on its contract with Therma Mobile.

All the players charged by the investigating unit did not explain why they withheld supply which triggered insufficient electricity traded at the spot market.

Prices at the spot market spiked in November and December 2013 due to the insufficiency in supply.

This led to higher generation charge for Meralco’s December bill. The spike reached P4.15 per kilowatt hour, which was eventually stopped by a temporary restraining order issued by the Supreme Court.

In a statement, Meralco’s legal department head Atty. William Pamintuan maintained that the firm complied with market rules and did not practice anti-competitive behavior.

“While we have not yet been furnished with a copy of the ERC IU report, Meralco maintains in its assertion which it had articulated before the ERC, Congress and Supreme Court, that it had acted strictly in accordance with the decision of the ERC approving the Power Supply Agreement with TMO which took into account Meralco’s least cost obligation to its consumers. The records will bear that Meralco complied with applicable market rules and did not engage in any anti-competitive behavior in its supply contract with TMO,” he said. –Alvin Elchico, ABS-CBN News