Power supply market probe yields findings of anomaly

BAGUIO CITY, Philippines—The Philippine Electricity Market Corp. (PEMC) on Friday said it discovered anomalies when it investigated the 2013 year-end transactions at the Wholesale Electricity Spot Market (WESM), which triggered increases in electricity rates.

But it is up to the Energy Regulatory Commission (ERC) to determine whether the anomalies were the result of manipulation, according to lawyer Phillip Adviento, PEMC manager for training and communications.

PEMC operates WESM where electricity produced by power generators is traded to power suppliers before it is distributed to consumers.

The ERC required PEMC to investigate WESM transactions in November and December last year, following an outcry over high power rates that were stopped by the courts.

“As far as practicable, market forces will govern the prices in the WESM subject only to the ERC’s authority over anticompetitive behavior,” Adviento said in an Oct. 24 letter to the Inquirer.

On Saturday, Adviento said the PEMC enforcement and compliance office found evidence of “anticompetitive behavior” in November and December 2013, which was discussed in a report to the ERC in August this year.

PEMC, he said, is not allowed to reveal the details of the report since it may preempt the ERC.

Among the findings, he said, involved violation of a rule that prohibits generating companies from withholding electric supply during trading because it affects volume and prices.

A summary chart of completed investigations, which PEMC posted on its website, showed that 11 generating companies were found to have committed breaches and may face penalties. These violations would be affirmed by the ERC.

But the investigation should deal with the relationships between power producers and suppliers because of allegations that some companies conspired to raise prices last year, according to Cordillera Region Cooperatives Association Inc. (Creca).

Last week, Creca and Region 1 Electric Cooperatives Association Inc. had urged power regulators to speed up the investigation of last year’s spike in electricity rates for which rural electric cooperatives were blamed.

Early this week, consumer activist People Opposed to unWarranted Electricity Rates (Power) claimed in a statement that the government was using flawed data to forecast a power deficit next year, which would justify granting Mr. Aquino emergency powers and exempting “juicy power supply contracts” from the regular bidding process.

Power convener Teodoro Casiño Jr. said the government “artificially and arbitrarily” set the prospective deficit for next year’s summer months from 631 megawatts to a high of 858 MW using 2014 data of power outages. Weather forecasters have declared 2015 as an El Niño year. Vincent Cabreza, Inquirer Northern Luzon