Senator Sergio Osmeña III INQUIRER FILE PHOTO
MANILA, Philippines – The Department of Energy (DOE) and the Energy Regulatory Commission (ERC) and the lack of experts in their offices were “the big ones at fault” over the market failure at the Wholesale Electricity Spot Market (WESM), a senator said on Thursday.
The issue of market failure cropped up during the first hearing of the committee on energy on the recent power hikes, said its chairman, Senator Sergio Osmeña III.
Osmeña though clarified that the market failure he was referring to was the shortage of power being offered at the WESM, which resulted in higher power rates.
“We’re still waiting for the results of the deeper investigation undertaken by the ERC on whether there was collusion or not,” Osmeña said at a press conference in the Senate.
“During our hearings, nakita po namin na if we had just added 300MW more to the supply offered on the market, the clearing price could not have been P32, it could have been only P12. And in some instances, it was even P5/kwh,” he said.
The ERC has already directed the Philippine Electricity Market Corp, operator of the WESM, to re-compute the generation charges it imposed on consumers of the Manila Electric Co (Meralco) last December and January.
The senator, nevertheless, viewed the move as a mere “political decision” by the ERC.
“Yes, they were pressured,” Osmeña said, responding to a reporter’s query. “The ERC made a political decision. It’s bad economics…”
“… The big ones at fault here were the Department of Energy and the ERC,” he further said.
Since 2007, Osmeña said, “There’s been awful, bad management at the Department of Energy.”
“It’s unfortunate because we have a very good law, many other countries in the world are trying to copy our law now,” he said, referring to the Electric Power Industry Reform Act or Epira.
“We have good law. But just like any law, it has to be managed properly. And we are hoping that the administration of President Aquino would really put good people there who will be able to plan long,” said the senator.
Osmeña noted the people in the DOE and ERC were either political appointees, who are not focused on the energy industry, or lawyers, who are not experts on energy.
“Ang mga political appointees po, only one-half of their attention is on the energy industry, which is a very complex industry. They have their political plans. They’re thinking of other matters that the President may assign to them. So you got only half a secretary. We want a full-time secretary,” he said.
“Secondly, the Secretary must be dedicated to energy for the long haul,” he said.
At the ERC, Osmeña said, the people being appointed there were lawyers.
“We don’t have the experts there. Nag-a-appoint po sila ng abogado, ano nangyari (They appoint lawyers, what happened)? We need computer experts, electrical engineers, power experts there,” he said.
“There are five members of the ERC. Up to now, one sit is vacant. They still haven’t appointed anyone. And there is only one non-lawyer there. Hindi po dapat ganun eh. It is very poorly managed,” the senator added.
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