NG starts review of PSALM’s WESM trading activities

The National Government (NG) will conduct a review of Power Sector Assets and Liabilities Management Corp. (PSALM) trading structures and processes in the Wholesale Electricity Spot Market (WESM).

Representatives from the Department of Finance (DOF), the Department of Trade and Industry (DTI), the National Economic and Development Authority (NEDA) and the Department of Energy (DOE) will form a committee after complaints were brought forward regarding alleged price manipulation at the trading of electricity at the WESM.

"The internal review by the members of the PSALM Board is meant to reinforce and not intended to preempt the on-going independent investigation being carried out by the Market Surveillance Committee (MSC)," the DOE said.

The power trading period under review spans from Aug. 29 to Sept. 25.

In that period, the price of electricity rose P2.88 per kilowatt hour (kWh) to P6.88. That price level would make electricity more expensive in contrast to its purpose of establishing a free market for power purchase by distribution utilities as well as individual corporates.

The incident forced the formation of the five-man Market Surveillance Committee of the Philippine Electricity Market Corp. (PEMC), operator of WESM. The surveilance committee is tasked to monitor and assess the trading activity of WESM participants to ensure efficiency and fair competition.

The members of the surveillance committee are Danilo P. Mercado, Peter Leslie Wallace, Rolando A. Danao and Fernando A. Dumuk.

Energy Secretary Raphael P.M. Lotilla in a press briefing that the questionable spread of the price of electricity on the spot market "can not be reflected in the consumer’s billings."

Price adjustments as a direct result of the price adjustments in question must first be applied with the Energy Regulatory Commission (ERC), based on a earlier ruling by the Supreme Court.

Lotilla was instructed by Malacanang to thoroughly investigate the alleged price manipulation, and "to ensure that consumers would not shoulder the burden."