Petilla pushing for quick resolution of ERC probe

The country’s energy chief said regulators must soon conclude the probe on the power rate surge that angered consumers amid tight electricity supply in late 2013.

Energy Secretary Jericho Petilla told reporters Wednesday that the report sent by the Energy Regulatory Commission’s (ERC) Investigating Unit to commissioners was basically the same as the report of energy spot market operator Philippine Electricity Market Corp. (PEMC).

“The must-offer rule violation is already established. Penalties have been defined already so what we need to know is, was there anti-competitive behavior? Yes or no? That’s it. It is not conclusive at this point,” Petilla said. “It’s up to ERC now.”

The only thing new with the ERC-IU report that was not in the PEMC report was the involvement of the Manila Electric Co. (Meralco) in terms of its power supply deal with Aboitiz-led Therma Mobile Inc. (TMO), Petilla said.

In the meantime, Petilla said, energy stakeholders such as the DOE and ERC have established market rules and policies to ensure that the price spikes of 2013 do not happen again.

Meralco, for its part, contests its involvement.

“While we have not yet been furnished with a copy of the ERC IU report, Meralco maintains in its assertion which it had articulated before the ERC, Congress and Supreme Court, that it had acted strictly in accordance with the decision of the ERC approving the Power Supply Agreement with TMO which took into account Meralco’s least cost obligation to its consumers. The records will bear that Meralco complied with applicable market rules and did not engage in any anti-competitive behavior in its supply contract with TMO,” Meralco’s head of legal affairs, William Pamintuan, said in a statement.

Thirteen power plant companies, including those owned or led by big industry players, face complaints of anti-competitive behavior before the ERC.

Executive director lawyer Francis Saturnino C. Juan said in a phone interview that the cases were set to be filed as of yesterday, June 3.

The ERC-IU said in a report that 13 energy generation companies or power stations withheld energy capacity during a period of tight electricity supply in 2013. This contributed to a record spike in power rates in late 2013.

However, the IU report did not directly say whether there was collusion among the players—something which was widely expected to be tackled.

As for anti-competitive behavior, cases will be filed at the ERC and will be prosecuted by the IU.

If found guilty, the respondents will have to pay fines as specified under Electric Power Industry Reform Act (EPIRA) of 2001. The range of fines under EPIRA is from P50,000 to P50 million.

Petilla believes, however, that the fines are “too small”.

The ERC official said respondents would be accorded due process, after which the ERC would decide on the imposition of penalties, if warranted, or grant of other “reliefs.”

It may be recalled that Wholesale Electricity Spot Market (WESM) prices surged during the supply months of November and December 2013 amid tight supply.

This prompted Meralco to pass on the higher generation charges, leading to record increases in overall power rates.