ERC nixes gencos’ rate hike bid

MANILA, Philippines–The Energy Regulatory Commission (ERC) has denied the motion for reconsideration filed by power generation companies (gencos) disputing its order that voided the Luzon Wholesale Electricity Spot Market (WESM) prices for November and December last year, for being “excessive, exorbitant, and unreasonable.”

In an order dated Oct. 15, the ERC said it issued the directive to safeguard the interest of the public by restoring the competitive prices in the market.

“Had the ERC not interceded, the consequences and effects of the unduly high electricity prices would have been more equally onerous on the consumers who ultimately shoulder the brunt of irrationally skyrocketing electricity rates,” it said.

ERC’s move was lauded by CitizenWatch, a citizen-led proconsumer group.

Test case

“This is an important test case, especially in light of the looming energy crisis in 2015,” said Wilford Wong, secretary general of CitizenWatch, adding that the development is a strong indication that there was indeed overpricing in the WESM.

The ERC, which should perform a watchdog function, is supposed to be on the side of the consumers, Wong added.

The ERC recently extended an imposed price cap on WESM trading in a bid to keep electricity prices stable.

Unusually high power rates which ensued following the maintenance shutdown of the Malampaya natural gas project had outraged customers in Metro Manila and the provinces, who urged the ERC to probe the alleged overpricing in the spot market.

“The tight supply and demand situation of power in the country makes it prone to spikes in electricity prices. We support the ERC’s moves to stop any cartel-like behavior of gencos for the interest of the general public who at the end of the day pays for the income of the power generators. The next step is to keep a firm vigil on this case, as we anticipate other legal remedies that the gencos will take,” said lawyer Tim Abejo, convenor of CitizenWatch.