PEMC imposes P234.9-M fine on Therma Mobile for capping power output

The Philippine Electricity Market Corp. (PEMC) has slapped Therma Mobile Inc. with a P234.9-million fine for withholding capacity that prompted the Manila Electric Company (Meralco) to ask for a record P4.16 per kilowatt hour (kWh) power rate increase in December 2013.

 

However, the Aboitiz Power Corp. subsidiary said it will study the legal options to take, saying it delivered all its available capacity to Meralco and that the PEMC findings has no basis.

 

The Supreme Court restrained Meralco from raising its rates and ordered the Energy Regulatory Commission (ERC) to investigate anti-competitive behavior and abuse of market power allegedly committed by some WESM participants.

 

Following the order, PEMC conducted investigations under the “Must Run” and “Must-Offer” rules of the Wholesale Electricity Spot Market (WESM) Rules.

 

PEMC is the operator of WESM, the trading floor where electricity is bought and sold. 

 

Financial penalties

Originally imposed on December 23, 2013, the high tribunal has since extended a temporary restraining order (TRO) against Meralco – preventing the power utility from collecting the additional P4.16 per kWh charge on the customers' monthly bills. The TRO was extended for an indefinite period of time.

 

The WESM operator claimed it discovered Therma Mobile has withheld capacity during the period. 

 

In a January 30, 2015 letter, the PEMC board imposed on Therma Mobile financial penalties amounting to P234.9 million.

 

According to the board, the penalties will be collected from Therma Mobile through the WESM settlement process. 

 

"[It will be collected] on time in accordance with the rules," PEMC president Melinda Ocampo said in a text message to GMA New Online.

 

But in an e-mailed statement, Therma Mobile insisted it followed the rules and delivered all its available capacity to customer Meralco, contrary to the latest PEMC findings.

 

AboitizPower said in a disclosure to the Philippine Stock Exchange the financial penalties imposed on its subsidiary will have an adverse effect on its financials.

Legal optionis

 

Therma Mobile is now studying its legal options with a view to clearing its name of any wrongdoing.

 

“We are very concerned that the decision of PEMC’s investigating unit did not consider the realities that TMO (Therma Mobile) faced to deliver the much needed 100MW for its customer, Meralco,” Therma Mobile president and COO Jovy P. Batiquin said.

 

The AboitizPower subsidiary said the four bunker-fired power barges in Navotas, Manila – which it took over in November 2013 – and its 115 kilovolt (kV) transmission facilities have not been operating for at least five years and needed rehabilitation.

 

Despite ongoing rehabilitation of the engines and transmission lines, the company was still able to “safely, reliably and consistently” supply Meralco with 100 MW.  

 

“Although our rated capacity is 234 megawatts (MW), we could not export as much because of the condition of our engines and the limitation of the 115kV transmission line,” Batiquin said.

 

Forcing the engines and the 115kV line to produce and deliver more than 100 MW at that time could cause the line to collapse of trigger a much-bigger problem for the Luzon grid, he added.

 

PEMC will have to wait if Therma Mobile could come up with a legal remedy. "If there are legal options then, what can we do?" Ocampo said. – VS, GMA News