Energy chief admits Psalm violated WESM rules | Inquirer News

Energy chief admits Psalm violated WESM rules

/ 07:20 PM February 11, 2014

Energy Secretary Jericho Carlos Petilla. INQUIRER.net FILE PHOTO

MANILA, Philippines—Energy Secretary Carlos Jericho Petilla admitted before the Supreme Court that the Power Sector Assets and Liabilities Management (Psalm) has committed anti-competitive behavior under the Wholesale Electricity Spot Market (WESM) rules by offering the Malaya Thermal Power Plant but not dispatching power in November during the Malampaya Power Plant shut down which could have prevented a spike in the power rate.

Psalm controls the Malaya Thermal Power Plant with a 600 megawatt capacity. It was supposed to exist to counter high electricity rate in the WESM.

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On the preparation for the Malampaya shutdown, Petilla said, Malaya’s role was “to be ready when needed.”

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However, in November 2013, it did not make an offer to counter the P62 per kilowatt hour (kWh) posting during off-peak hours that led the Manila Electric Company (Meralco) to charge an additional P4.15 per kWh in generation charges.

During Part 3 of the oral argument against the record high power rate hike, Associate Justice Marvic Leonen asked Petilla about the “open breaker status” to which the Energy Chief said it means that the power plant made an offer but that plant is unable to dispatch because it is not actually running.

When asked if the action of offering in the spot market but not actually dispatching is illegal, Petilla said “it is not legal and it has been repeated by Psalm several times.”

“Was it repeated in November,” Leonen asked to which Petilla said yes.

“Rule 7.4.3 of the WESM; the following conduct of the WESM member shall among others be considered as anti-competitive behavior etc., a physical withholding or the refusal to offer or sell or schedule the maximum available output etc. so wouldn’t you consider it clearly per se anti-competitive behavior and thus illegal,” Leonen asked. Petilla said yes.

Leonen further asked if Psalm is operating at a loss in November last year, Petilla said it was actually earning that it even gave bonuses to its employees.

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Last month, during the hearing at the House Energy Committee, Psalm President Emmanuel Ledesma Jr. admitted that they did not run the Malaya power plant during the said period as it could lead to losses of P1.3 to P1.8 million daily given that the bids in the WESM were too low at P3 to P5 per kWh.

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