ERC: Plant outages meant higher power rates

Posted at 01/21/2014 11:29 PM

MANILA, Philippines – Preliminary findings of the investigative unit of the Energy Regulatory Commission (ERC) tasked to probe a possible collusion among power producers showed that plant outages affected the supply situation and contributed to "historical high bids" in trading of electricity.

“The supply situation during the period October 26, 2013 to December 25, 2013 is a factor which contributed to the historical high bids being accepted as clearing prices on several trading intervals,” ERC said in its memorandum.

"In turn, factors that affected the supply situation were plant outages and non-offer by plants," it added.

ERC said the Philippine Electricity Market Corporation (PEMC) presented data before the commission in a clarificatory hearing on January 10 to show the generator and market situation during the said period.

The PEMC also submitted trading data to the ERC on January 13, which the commission is currently studying.
Data includes the name of generator, bid offers, and total trading amount for each participant on a per day and per trading interval basis.

“Subsequent subpoenas and invitations to conferences will be made after preliminary examination of the data has been made,” the ERC said.

ERC added that the investigating unit needs “a significant amount of time” to collect, prepare, validate and assess the data before giving a recommendation.

The ERC earlier said it could take months to find out whether collusion among power producers happened during the trading of electricity when the Malampaya natural gas facility was on shutdown from November 11 to December 10, 2013.

On Tuesday, oral arguments were held at the Supreme Court to discuss Meralco’s P4.15 per kilowatt hour (kwh) power rate adjustment. [http://www.abs-cbnnews.com/business/01/21/14/petitioners-accuse-meralco-price-manipulation]

Petitioners accused Meralco of price manipulation in the Wholesale Electricity Spot Market (WESM) that led to the higher generation charge.

One of the petitioners, Bayan Muna Rep Neri Colmenares, said Meralco made the highest bid in the WESM, through its power supplier, Therma Mobile.

Colmenares said this raised the generation charge passed on to Meralco's consumers because the highest price becomes the spot market's "clearing price," which "in turn becomes the price of the market."

ERC was also accused of committing grave abuse of discretion amounting to lack of jurisdiction when it approved without a hearing and investigation the P4.15 rate hike. -- With a report from Ina Reformina, ABS-CBN News