PSALM guilty of price manipulation

The operator of the Philippines' wholesale electricity spot market said on Wednesday that state-run Power Sector Assets and Liabilities Management Corp. (PSALM) was guilty of price manipulation after investigating bids quoted at the energy exchange from August to September. In a statement, the Philippine Electricity Market Corp. (PEMC), which operates the country's electricity spot market, said it has directed a correction of the affected bills for the period August 25-September 25 to protect the interests of consumers. This is to ensure that higher price offers in the WESM will not be passed on to consumers. "The PEM Board directed the implementation of mitigating measures to safeguard the interests of consumers and to reduce market imperfections arising from the design and structure of trading teams," PEMC said in a statement. Over a month ago, PSALM was probed by PEMC for allegedly submitting "unusual price bids" at the electricity spot market for the period August to September. PSALM is a government entity created to handle the finances of the National Power Corp. (Napocor), including the privatization of the state-owned power firm's assets. It also administers the IPP (independent power producers) supply contracts of Napocor. PSALM accounts for about 50 percent of WESM trading volume. Created under the Electric Power Industry Reform Act of 2001 or Republic Act 9136, PSALM has four teams consisting of 16 power plants that have been trading in the WESM. PEMC's market surveillance committee determined after a probe that PSALM "behaved anti-competitively and abused market power during peak hours in the billing period August 25–September 25, following offers of unusually high, similar price bids." The committee recommended the transfer of the management and control of at least 70 percent of the total energy output of IPP power plants under contract with the Napocor to IPP administrators, to avoid a repeat of the incident. - GMANews.TV