ERC vows to slap penalties on WESM price-fixing offenders
Monday, October 23, 2006
By MYRNA M. VELASCO
Should investigation proves beyond reasonable doubt that any of the trading teams of the Power Sector Assets and Liabilities Management Corporation (PSALM) arbitrarily initiated acts to manipulate prices at the Wholesale Electricity Spot Market (WESM), the Energy Regulatory Commission (ERC) declared that those found responsible shall be slapped with penalties.
"If anti-competitive behavior is established and duly reported to the ERC, appropriate remedies such as directives to fix or control the price will be issued and the appropriate penalties imposed, after observance of the requirements of due process," said ERC Commissioner and Officer–in–Charge Alejandro Z. Barin.
He added that the regulatory body is still awaiting any submissions to be made by the Philippine Electricity Market Corporation (PEMC) in the investigation it is undertaking, which is planned for completion within 45 days.
"The ERC will evaluate and validate PEMC’s report according to set procedures," Barin explained.
The PEMC was prompted to probe alleged pricefixing that may have been instigated by PSALM on the electricity spot market’s third month of operation, covering the August 26 to September 25 billing cycle; after dramatic spikes in load weighted average price of traded volumes were noted.
While some parties are quick to point out that the market gouging may have transpired because of lax regulatory approach of the ERC, Barin noted that such allegation is unfounded because policies to be undertaken are clearly set out under the promulgated Competition Rules and Complaint Procedures.
These rules are specifically set forth to penalize abuse of market power and/or anti-competitive behavior, primarily those relevant to the operation of the WESM.
PEMC already made previous announcements that consumers shall at least feel temporary relief because the higher electricity prices from WESM trading for the month of September have not been calendared yet for pass-on, pending the result of the ongoing investigation.
PEMC president Lasse Holopainen explained that given the billing lag of at least 78 days, it would take time before these rates will be reflected in the consumers’ electricity bills; and evidently, the pass on of the costs shall rest on the outcome of the probe.
"Depending on the results of the investigation, which is expected to be completed in 45 days, these prices may be adjusted to ensure the protection of electricity consumers or they may be proven valid and let stand," Holopainen stressed.
While at the thick of the investigation process, the PEMC chief executive has appealed to the public to veer away from "making prejudgment of the situation"; adding that appropriate safety nets are in place to protect end-consumers.
PSALM has been deploying its four trading teams for the WESM, independent of those manning the power plants owned by state-run National Power Corporation. (MMV)
posted by philpower @ 8:35 AM,
