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MANILA, Philippines – The Department of Justice (DOJ) will continue its investigation into the spike in power prices late last year, Justice Secretary Leila de Lima announced on Friday, March 14.
De Lima said the decision was prompted by the pronouncement of the Energy Regulatory Commission (ERC) that the increase in power prices late last year was due to the refusal of certain power plants to offer full capacities in the Wholesale Electricity Spot Market (WESM). (READ Rappler’s special report: What Meralco’s rate hike tells us about the power sector)
She cited Executive Order No. 45 series of 2011, which created the DOJ Office of Competition (DOJ-OFC), the country’s first competition authority.
The DOJ-OFC is tasked to investigate and prosecute cases involving violation of competition laws and to conduct market studies to guide industries and consumers.
“This is no doubt the start of a new direction by regulators to protect consumers, anchored on the basic tenets of competition law and economic justice. Our OFC will continue with its investigation bearing in mind its mandate to protect the interest of the consumers,” the DOJ chief said.
In its decision dated March 3 but made public on March 11, ERC ordered WESM operator Philippine Electricity Market Corporation (PEMC) to cut the generation charges it imposed on Luzon consumers in December 2013 and January 2014.
ERC said that the violation of the WESM’s “must-offer rule” by some generation companies contributed to the tightness in power supply that jacked up prices.
The DOJ cited the portion of the ERC order where the regulator highlighted that its issuance is “without prejudice to the results of the investigations into the possible culpability of any or all of the market participants.”
DOJ Assistant Secretary Geronimo Sy, DOJ-OFC head, said it is “clear” in the ERC directive “that there is still a need to determine whether there was abuse of market power or any other form of anti-competitive behavior in the electricity market.”
“We must ensure that there is genuine cooperation among the firms so that they cannot individually or collectively dictate the price at the expense of end-users,” Sy said.
Several concerned groups earlier field a complaint with the DOJ-OFC claiming there was collusion among some power industry players. – Rappler.com
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