ERC regains jurisdiction over collusion cases

Published February 18, 2021, 5:29 PM

by Myrna M. Velasco

The Energy Regulatory Commission (ERC) was able to reclaim jurisdiction over hearings and investigation of cases of anti-competitive behavior or collusion raps against the power generation companies.

According to Atty. Maria Corazon C. Gines, director of ERC’s Legal Services, the Supreme Court ruled that the ERC has the investigate power over unscrupulous trading acts in the Wholesale Electricity Spot Market (WESM), despite earlier questions raised by some parties that the jurisdiction of such cases shall have been tossed to the Philippine Competition Commission.

Energy Regulatory Commission (ERC FACEBOOK / MANILA BULLETIN)

She said the case was elevated to the Supreme Court, parties-in-interest were claiming that the PCC.

“That has been resolved by the Courts; and the Court stated that the Commission retains its jurisdiction over the said cases,” said Gines.

With this development, Gines said “We’d be able to move the cases in the near future; and there are already preliminary actions that the Commission has been doing to expedite the resolution of these cases.”

She was referring to the 2013 and 2016 allegations of collusion or anti-competitive market behavior lodged against trading participants in the WESM, which had been collectively placed under the investigation unit (IU) of the ERC.

 As summer months are inching closer, relevant industry stakeholders are keenly watching again trading behaviors in the electricity spot market – and it comes off as a continuing puzzle why it has been taking way too long for the ERC to act on or resolve the previous market collusion imputations.

Such allegations of anti-competitive practices in the spot market could wobble the industry – chiefly in the peak demand months of summer, because unexplained unavailability of capacities or forced outages of power plants could result in unwarranted price spikes.

The very first complaint of collusion in the spot market which implicated state-run Power Sector Assets and Liabilities Management Corporation (PSALM) in 2006, was dismissed by the ERC because “the culpability of the parties were not sufficiently established,” Gines noted.

Taking cue from that then, the entire industry is eagle eyed as to how the regulatory body will decide on the two pending IU cases – especially the 2013 case because that triggered massive spikes in spot prices.

The ERC previously indicated that it encountered hurdles in the validation and analysis of voluminous data relative to the WESM transactions during the questioned period, which then coincided with the November-December 2013 shutdown of the Malampaya gas production facility.