Petilla: PSALM was instructed to run when needed


Posted at Feb 12 2014 05:08 PM | Updated as of Feb 13 2014 01:14 AM

MANILA, Philippines – Energy Secretary Jericho Petilla on Wednesday said the Power Sector Assets and Liabilities Management (PSALM) violated rules of the Wholesale Electricity Spot Market (WESM) when it did not dispatch power from the Malaya thermal power plant last December despite making a bid.

Petilla said he cannot say where the order to not dispatch power came from, saying his instruction to PSALM was “to run when they are needed.”

“The anti-competitive nature of that action was based on the fact that any violations to the two rules of WESM, which are the ‘must offer’ and real time dispatch, puts imbalance on the competition. However, that happens every now and then. There were in the past, generators who did offer but did not dispatch in full, there were some who did not offer at all, and as long as you have a reason why you are doing this, it can be justified. What we are telling the public is that PSALM clearly did not dispatch,” Petilla told ANC.

He said an investigation is ongoing and PSALM will be given an opportunity to justify its actions.

“There are gaps between what the system operator is saying that we have a supply and what is being offered in the market and that gap is something that is not offered and we are trying to find out who these are and the reasons why they were not offered. It’s not only about Malaya at this point, it’s about everybody who’s causing that gap,” he said.

Power prices at the spot market spiked to P62 per kilowatt hour, which became the clearing price for all power generation companies because Malaya did not dispatch power.

PSALM earlier told a Senate hearing that it cannot run the Malaya plant on a regular basis because it will be costly.

PSALM’s board of directors is composed of the Department of Finance, Department of Energy and other government agencies.