DOE to investigate alleged WESM price manipulation

ABS-CBN News

Posted at Feb 24 2010 07:28 PM | Updated as of Feb 25 2010 03:28 AM

MANILA, Philippines - The Department of Energy (DOE) will investigate claims by presidential economic adviser Joey Salceda that prices at the wholesale electricity sport market (WESM) are being manipulated amid shortage in power supply.

Energy Secretary Angelo Reyes told reporters they will direct the Philippine Electricity Market Corp. (PEMC), operator of the country's WESM, to look closely into the alleged spikes in prices at the electricity spot market.

The energy chief specifically called the PEMC's attention to "validate the veracity of the facts mentioned by the good governor (Albay Governor Joey Salceda)."

"We will have PEMC president Mel Ocampo report to the Energy Department as soon as possible and we will answer the observations," Reyes said.

Earlier, Salceda alleged that prices at the WESM, the trading floor for electricity, went up to as high as P68 per kilowatt-hour last February 11, 12, 13 due to the power shortage resulting from the El Nino phenomenon.

"The P68 per kWh rate is too much and it's something that we have to look at very, very urgently," Reyes said.

"Price manipulation is a very serious offense and it is a public interest issue and we will deal very harshly against people charged with this in the electricity spot market," he added.

Electricity prices at the WESM rose by 28% in January as the dry spell curtailed hydro power generation, and forced the more expensive diesel power plants to operate.

Prices averaged P4.56 per kWh in January compared to P3.56 in December. WESM prices showed that from February 18 to 22, prices went up to as high as P16 per kilowatt-hour.

"Insufficient energy offers were experienced in most of the trading intervals due to the high level of plant outages (scheduled maintenance and forced outages) coupled with limited hydroelectric plant capability. These conditions also resulted in high clearing prices in the market," PEMC said in its latest report.