Outcome of power producers ‘collusion’ probe out soon

A committee composed of the Energy Regulation Commission, the Department of Energy and the Philippine Electricity Market Corporation is investigating the reason for the steep increase in Meralco's rates

NO HIKE YET. File photo of Filipinos lining up for the electric bill subsidy given by the government in 2008. This was amid allegations that Meralco was overpricing electricity in the same year. Photo from EPA/ Rolex dela Cruz

MANILA, Philippines – The outcome of the probe into the possible collusion among power producers that led to the spike in Meralco’s power rates may be released next week, according to the Energy Regulatory Commission (ERC). (Read: Market abuse? DOJ sets probe amid Meralco price hike)

“January 13 is the first regular meeting. I’m just not sure if that’s when investigating unit will present to the commission. We will know within the week but it’s possible that it could be earlier than January 13 or possibly anytime after. Still, we have to meet in time for the January 23 committee hearing at the Senate,” ERC Commissioner Josefine Magpale-Asirit said.

Aside from the ERC, the Department of Energy (DOE) and the Philippine Electricity Market Corporation (PEMC), operator of the Wholesale Electricity Spot Market (WESM), are members of the probing committee.

Energy Secretary Jericho Petilla said separately, however, that DOE and PEMC are merely coordinators in the committee and that the probe is solely being handled by ERC.

“The tripartite agreed that under the EPIRA law, only ERC has the authority to conduct investigation and set penalty for anti-competitive behavior. The tripartite will continue to coordinate on the sharing of information but the investigation will be handled by the ERC,” said Petilla in a text message.

Rate hike, outages and denials

The Manila Electric Company (Meralco) was set to implement a P4.15-per-kilowatt-hour (kWh) power rate hike in December after a December 9 approval by the ERC. The utility firm cited the shutdown of the Malampaya gas field and outages of other plants as the reason for the increase in the generation cost.

Following cases filed by various groups, the Supreme Court on December 23 issued a temporary restraining order (TRO) on the power hike and set oral arguments on January 21. Meralco, the ERC and the DOE are respondents to the case. (Read: SC stops Meralco power rate hike)

The plants that implemented unplanned outages include the 1,000-megawatt (MW) Sta. Rita and 500-MW San Lorenzo power plants owned by First Gas Power Corporation; the 1,200-MW Ilijan plant of Kepco Philippines Corporation; the 730-MW Pagbilao power plant of Team Energy Corporation; the 600-MW Masinloc power plant of AES Philipines; and the 600-MW Calaca power plant of DMCI Holdings Inc.

Meralco said the outages forced it to source more expensive power from WESM.

But power producers operating the plants being investigated denied allegations that they conspired to tighten supply.

Senator Francis Escudero earlier said that if there was any irregularity, it was in WESM. He said WESM participants were the ones that earned from what happened, not the plants that shut down.

EPIRA failure?

Presidential Communications Secretary Herminio Coloma Jr. in a press briefing on Sunday, January 5 said Malacañang is open to an in-depth study and analysis of the Electric Power Industry Reform Act of 2001 (EPIRA) for possible amendments.

This after Senate President Franklin Drilon and some quarters called for a review of the 12-year-old law regulating the power industry. In a press briefing on December 19, Drilon said that it is clear that EPIRA failed to achieve its objectives.

“The EPIRA law is supposed to promote free competition in order that the consumers can benefit from a lower but efficient power generation system. The opposite apparently happened,” Drilon said.

Coloma said the positions of all sectors involved must be heard and taken into consideration.

“We can arrive at a common ground once we’ve had discourse and coordination with the stakeholders involved. This is so we can get the opinion of the Filipino people and not just the views of one or 2 sectors,” Coloma said in Filipino.

He added, “We can only give concrete recommendations for amendments to EPIRA after following this process…We cannot just certify the urgency of a law if we don’t have a clear idea of what concrete reforms the public want.”

Drilon said he has yet to check the law to see what specific amendments are needed. He stressed the power rate hike showed the need to change the law. The Senate Energy Committee is set to have its second committee hearing on the energy rate hike on January 23.

Coloma assured the public that DOE is doing its best to ensure stable power supply nationwide.

“DOE is coordinating with different sectors to secure stable energy supply because this is crucial to our national growth and to achieving our economic development objectives,” Coloma said in Filipino. – Rappler.com

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