The country’s antitrust regulator approved the sale of three Luzon hydroelectric power plants to a unit of Aboitiz Power Corp. after the conglomerate pledged to cap prices and maintain supply levels to prevent market dominance in the grid’s reserve power sector.

In a statement, the Philippine Competition Commission (PCC) said it cleared the acquisition of the Caliraya-Botocan-Kalayaan (CBK) hydroelectric complex by Cleanergy 9 Power Inc. from the state-run Power Sector Assets and Liabilities Management Corp. (PSALM).

But the PCC approval hinges on a series of voluntary commitments designed to curb the Aboitiz Group’s ability to influence prices in the ancillary services market, where the company already holds a leading position.

During an initial review, the commission found that the deal could give the Aboitiz Group the incentive to unilaterally raise prices or withhold capacity for regulating, contingency, and dispatchable reserves.

These services are critical for maintaining the stability of the Luzon power grid. The regulator highlighted a particular risk during an interim period ending in the second quarter of 2027, when reserve capacity may face tighter constraints.

To secure the deal, the Aboitiz Group committed to filing a comprehensive tariff application for the Kalayaan Pumped Storage Power Plant with the Energy Regulatory Commission (ERC) within a set timeframe.

The company also agreed to strict pricing and capacity allocation rules for its offers in the reserve segment of the Wholesale Electricity Spot Market (WESM). These measures are intended to act as safeguard until a formal tariff structure is finalized by the power regulator.

The CBK complex is a strategic asset for the Philippine energy sector, with the Kalayaan facility designated by the Department of Energy (DOE) as an energy project of national significance. Its ability to pump and store water for peak-demand generation makes it a vital component of the country’s grid reliability.

To ensure the conglomerate follows through on its promises, the PCC said the commission mandated the appointment of a senior competition compliance officer within 15 business days.

The officer will be tasked with monitoring the group’s bidding behavior and serving as a direct liaison with the antitrust body.

PCC Chairperson Michael Aguinaldo said the targeted commitments are intended to protect consumers from price volatility during the transition of ownership.

The regulator’s mandate includes evaluating whether such mergers substantially lessen competition, focusing on the long-term impact on supply and consumer costs.

The sale of the CBK plants is part of the government’s long-standing effort to privatize state-owned energy assets and settle the remaining debts of the National Power Corp. through PSALM.