ERC says PSALM did not rig spot market prices

The Energy Regulatory Commission on Monday cleared the Power Sector Assets and Liabilities Management Corp. of charges that it has manipulated the prices in the Wholesale Electricity Spot Market. ERC chairman Rodolfo Albano said there is no prima facie evidence that would show PSALM guilty of influencing prices at the spot market. "The investigating unit found no prima facie case against PSALM for anti-competitive behavior of market power abuse and the ERC agreed in saying it cannot rely on speculation, conjecture or guesswork to establish the act or conduct of PSALM that amounts to anti-competitive (behavior) or market power abuse," Albano told reporters during a press briefing. However, Albano said it would be probing instead, the National Power Corp., which the investigating unit found to have suggested "price fixing" schemes to PSALM. Lawyer Francis Saturnino C. Juan, head of the investigating unit, said they discovered letters sent by Napocor to PSALM which recommends for possible “price fixing". PSALM, Juan said, rejected the suggestions. “The National Power Corporation wrote PSALM twice and one of the letters recommended the adoption of certain policies by both parties which if accepted and implemented would have amounted to a price fixing arrangement that is expressly prohibited in the EPIRA and its IRR," Juan said. Asked why they have not included Napocor in its investigation considering there is evidence of qualified price fixing, Juan said it’s already beyond their powers and only ERC could to the investigation motu propio. “Our authority was just to investigate PSALM," Juan said. Had PSALM accepted Napocor's recommendations, Juan said “they would really be in the position to control the [spot] market". “The commission already took note of that conduct by Napocor and warned that it should be more circumspect in its dealing with PSALM considering that the market share of Napocor if you add from the market share of PSALM they would be in control of the market and they would be in the position to dictate prices in the WESM. So we warned Napocor not to repeat the same act of writing PSALM and proposing certain strategies or recommendations that would have affected the prices at WESM," the official added. But instead of castigating the Napocor, Albano admitted that they have just issued stern warning with Napocor. “In [our] order, not to penalize Napocor immediately we issued a stern warning on them not to repeat the same suggestions," Albano said. WESM operator Philippine Electricity Market Corp. has accused PSALM of making expensive price offers during the August-September trade cycle, which it said caused higher power rates. PEMC president Lassi-Matti Holopainen has said that his agency saw signs of price manipulation during the August-September 2006 trading cycle when the load weighted average price or average price at the WESM spiked to P4.853 per kilowatt hour. In its first month of operation in June 2006, the LWAP came in at only P2.788 per kwh. It was at P3.079 per kwh in its second month of operations. - GMANews.TV