Ducut: Collusion probe to take 2 months

by Iris Gonzales, The Philippine Star

Posted at Jan 26 2014 11:20 AM | Updated as of Jan 26 2014 07:20 PM

MANILA - The Energy Regulatory Commission (ERC) will need at least two months to complete its investigation into the alleged collusion and market abuse by power producers, which may have led to the spike in electricity price last December.

ERC Chairman Zenaida Ducut, under fire for the rate hike and what many considered the slow pace of the investigation, yesterday appealed for understanding, saying their task is “very complex” and “data intensive.”

“The ERC-Investigating Unit (IU) is doing its best to come up with an impartial and comprehensive investigation report,” she said.

She said “thousands of hours of trading intervals and price offers” need to be examined thoroughly as part of the investigation.

“The ERC already asked the IU head about his timeline after the IU received data submissions from the market operator and he committed to complete his investigation in two months,” Ducut said.
The IU head is Isabelo Joseph Tomas II.

The market operator is the Philippine Electricity Market Corp. (PEMC), which operates the Wholesale Electricity Spot Market (WESM), where power producers and buyers trade electricity.

The generation charge of Manila Electric Co. (Meralco), the country’s largest power distributor, skyrocketed to P3.44 per kilowatt-hour (kwh) last December after the Malampaya gas field went on a month-long maintenance shutdown, prompting Luzon power plant operators to use more expensive liquid fuel.

The generation charge is the cost of power purchased by Meralco. It accounts for 65 percent of total energy cost indicated in billing statements.

At the Senate Committee on Energy hearing on Thursday, panel chairman Sergio Osmeña III lambasted the ERC for the slow pace of the investigation.

Ducut told Osmeña that the commission would be ready with its findings within three months but the lawmaker said this was too long. “Are you hiding something?” Osmeña asked.

“No, Mr. Chair. We are not hiding anything. We are asking for more time,” Ducut replied.

Energy Secretary Carlos Jericho Petilla said his department is conducting its own investigation, the result of which would be submitted to the ERC.

He said there was a need to look into the “bidding behavior,” considering there was sufficient supply during the Malampaya shutdown.

Ducut also said the ERC approved Meralco’s staggered rate increase in its generation charge and not the rate itself.

“(What) the ERC approved on Dec. 9, 2013 was the clearance sought by Meralco to stagger the collection of its generation cost for the November 2013 supply month and NOT (emphasis ERC’s) the P4.15 per kilowatt-hour rate increase of Meralco, which it calculated in accordance with the Automatic Rate Adjustment (AGRA) rules promulgated by the ERC as a collegial body in 2004, even before she (Ducut) became the ERC chairperson,” the ERC said in a statement. – With Marvin Sy