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Petilla admission proof of collusion, says Rep. Colmenares

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Petilla admission proof of collusion, says Rep. Colmenares

/ 02:28 AM January 25, 2014

Energy Secretary Jericho Petilla and Bayan Muna Rep. Neri Javier Colmenares. AP/INQUIRER FILE PHOTOS

Energy Secretary Jericho Petilla’s admission that there was adequate power supply when the Malampaya natural gas facility went off grid for one month last year is proof that there was collusion among the energy market players to ramp up prices, according to militant party-list members at the House of Representatives.

Petilla’s admission further strengthens their position that there was price manipulation in the Wholesale Electricity Spot Market (WESM), said Bayan Muna Rep. Neri Javier Colmenares.

“The fact that the DOE (Department of Energy) admitted that there was enough supply means that the price of electricity drastically and substantially went up not because there was an increase in the generation companies’ production cost or lack of supply but because energy players colluded or manipulated the price to go up,” he said.

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“The power cartel and the Aquino government are fooling the people, they should be held accountable for this and heads should roll for this affront to the Filipino people,” said Colmenares.

Grandstanding, scapegoating

But while the state-run Power Sector Assets and Liabilities Management Corp. (PSALM) should be blamed for not intervening to tame the spike in rates offered at the WESM, it should not be used as a “scapegoat” so that other private players that made a killing from jacking up power prices should evade punishment, said ACT Teachers Rep. Antonio Tinio.

He said all the sound and fury directed at the PSALM for not ordering the state-owned Malaya thermal plant to operate during the shutdown of Malampaya and other power plants was “just populist grandstanding” and “an exercise in scapegoating.”

At a Senate hearing last Thursday, senators took turns berating the PSALM, which controls Malaya, for not intervening in the market by activating the 650-megawatt plant in Rizal province which serves as a reserve power facility.

“Is Malaya being blamed for the sky-high rate increase to deflect attention from the culpability of Meralco (Manila Electric Co.) and the private power producers as well as the Energy Regulatory Commission’s dereliction of its duty?” asked Tinio, who is proposing that the government again take over power generation to ensure a stable and affordable power supply.

Tinio noted that the Malaya was “ill-suited” to act as the government main tool to intervene in the market.

“The fact is that, under Epira (Electric Power Industry Reform Act), the Malaya plant is a government asset intended for privatization, and PSALM’s mandate is primarily to maintain its financial viability, not to look after the welfare of consumers. Government should have the right tools to protect the interest of consumers, and this can only be done through a return to power generation, which requires legislation,” said Tinio.

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Aquino’s position

Meanwhile at a Palace briefing on Friday, Communications Secretary Herminio Coloma attempted to explain President Aquino’s position on the power shortage that was invoked by Meralco in seeking the price increase and the alleged collusion in the deregulated power sector.

He said Mr. Aquino stated his personal position thus: “My position personally is, if it was a commercial decision that was wrong, government never promised that they will be shielded from their wrong decisions. Again let me emphasize ‘if’ (since) the investigation should be concluded first.”

“To summarize, here are the salient points of the President’s position. No. 1, preparation and contingency planning. He said and I quote:  ‘Preparations should have been made for foreseeable events.’ No. 2, prevention and regulation— ‘Government shall act to prevent collusion.’ No. 3, protection of citizen’s welfare—‘Government will ensure that unjustifiable price hikes are not passed on to and borne by the consumers,’” Coloma said quoting the President.

He said that Mr. Aquino has noted that the shutdown of Malampaya was “not an unusual event (since) it happens every two to three years.”

“There is periodic maintenance required. That’s a foreseen event or foreseeable event. If you know that your producer of fuel will not be able to produce, then you have to find a substitute. So preparations should have been made for foreseeable events,” said the President.

Coloma also recalled the President as saying that “our impression is, there are people who really made a very significant profit from this situation under the Epira. There is need to look into possible collusion and abuse of market power. And if there were unjustifiable profits, the ERC can order a disgorgement of these profits.”

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Government to review use of Malampaya fund

Aquino eyes use of Malampaya Fund

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TAGS: ACT Teachers, Bayan Muna Rep. Neri Javier Colmenares, Department of Energy, Energy Secretary Petilla, Jerico Petilla, Malampaya fund, Malapaya, Power Sector Assets and Liabilities Management Corp., Psalm, Rolando Tinio, WESM, Wholesale Electricity Spot Market
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