ERC fails to come up with conclusive findings on Dec 2013 power rate spike

MANILA, Philippines - Did power generators conspire to jack up electricity prices in December 2013?

After almost a year since the price spikes happened, the Energy Regulatory Commission (ERC) said it is still difficult to make such a conclusion.

 “A solid conclusion can only be arrived at after circumspect and prudent deliberations,” the ERC said late Thursday after militant party-list group Bayan Muna filed before the Office of the Ombudsman criminal charges against the agency’s top officials.

On Tuesday, Bayan Muna filed charges against ERC chairman Zenaida Ducut and commissioners Alfredo Non, Gloria Victoria Yap-Taruc and Josefina Patricia Asirit for failing to release last month the findings on last year’s incident as they earlier committed to Congress.

In December 2013, the generation charge of power distributor Manila Electric Co. (Meralco) rose to a record high P9.10 per kilowatt-hour from only P5.67 per kwh the previous month and further to P10.23 per kwh in January 2014.

The Supreme Court immediately issued a temporary restraining order (TRO) on the December 2013 power rate and has yet to rule on the matter.

ERC has since launched an investigation into the reasons behind the price spike but has yet to release its findings.

The power regulator said that it has an ad hoc investigating unit (IU), which is independent from the commission, that is doing the investigation.

The ERC’s IU is led by lawyer Isabelo Joseph Tomas II and is composed of six members.

The investigation is focused on whether there is individual liability or even a criminal conspiracy under Sec. 45 of EPIRA (Electric Power Industry Reform Act of 2001) regarding the withheld generating capacities, unplanned shutdowns and high bids offered at the Wholesale Electricity Spot Market (WESM), the country’s trading floor for electricity, the ERC said.

The ERC said the IU has only concluded early this month the analysis of the voluminous data involved in 1,440 transactions at the WESM in October and November 2013 which affected the prices in the December 2013 and January 2014 billing months.

The 1,440 WESM transactions transpired over 24 hours everyday for a period of two months.

The high prices at the electricity spot market in the October and November 2013 supply months pushed the prices of Meralco higher during the November 2013 and January 2014 billing months. Prices also went up because the Malampaya natural gas oil field in offshore Palawan, which supplies gas to three power plants in Luzon, went on a month-long maintenance shutdown from Nov. 11 to Dec. 10, 2013.

Tomas said the 1,440 transactions in question had to be compared to 10,080 historical and normal transactions over a period of 14 months, or from July 2012 to September 2013, when the Malampaya also experienced gas constraints, to come up with a comprehensive evaluation.