Too few players in electricity spot market, says solon
Thursday, October 12, 2006
By Maila AgerINQ7.net
REPRESENTATIVE Jose Salceda, chairman of the House appropriations committee, said he was convinced that there was price manipulation in the Wholesale Electricity Spot Market (WESM) when the price jumped to 6.80 pesos per kilowatt-hour from 2.72 pesos despite an absence of changes in demand and supply.
Salceda, an adviser to President Gloria Macapagal-Arroyo and former stock analyst, noted that the only players in the electricity spot market were the privatization agency Power Sector Asset and Liabilities Management Corp, (PSALM), state-owned electricity producer National Power Corp. (Napocor) and Metro Manila power retailer Manila Electric Co. (Meralco).
“It's an oligopolistic market,” he said at a press conference. “There are very few players in the market.”
House energy committee chairman Representative Alipio Badelles said it was too early to conclude that there was price manipulation in the market.
“It's too premature to make a judgment right now, because we know that in the generation of electricity, there are several factors that are considered,” he said.
“There is no such thing as uniformity of costing,” Badelles said. “From one power plant to another power plant trading in the spot market, necessarily there are variances in their costing. And if there are variances, it means their submitted offered prices would be different also.”
He said people should await results of an investigation being done by the WESM operator, Philippine Electricity Market Corp., which he said was expected to submit its findings in the coming days.
Badelles acknowledged that the spot market was being dominated by PSALM, which controls about 60 percent of the power generation sector. “And because it's a dominant player, the suspicion is that there is going to be no real competition,” he said.
Badelles said sanctions, such as suspension of trading privilege and monetary sanctions, would be imposed on the erring parties.
He also pressed for privatization of Napocor assets to allow real competition in the market.
“The position of the [energy] committee is that until there is privatization of the assets of Napocor, until such time the generation sector is no longer dominated by one or two players, it's going to be difficult to have real competition in the real spot market,” he said.
He said the high price in the spot market would reflect in household electricity bills next month
posted by philpower @ 8:06 AM,
