In a press conference, ERC chairman Rodolfo Albano Jr. said an investigation team composed of ERC officers has been formed to undertake its own probe on apparent price manipulation of the state-run Power Sector Assets and Liabilities Management Corp. (PSALM).
He said concerned parties from PSALM and WESM operator Philippine Electricity Market Corp. (PEMC) have already been summoned to appear and present their respective arguments before the ERC probe team.
"The investigation committee met last week and lined up procedures. We have issued notices for PSALM and PEMC to submit their explanations on the allegations of price manipulation at WESM," he said.
PEMC president Lasse Holopainen two months ago ordered an investigation on PSALM over the alleged price fixing.
Albano also assured the electric power industry stakeholders and the general public that it would act judiciously on the case.
The PEMC’s Market Surveillance Committee (MSC) report regarding the controversy was forwarded to the ERC last Nov. 24, 2006. "The ERC will urgently attend to this controversy," Albano said.
Pursuant to the Electric Power Industry Reform Act (EPIRA), the ERC is mandated to oversee the proper operation and penalize anti-competitive practices in the electricity market. Under Sec. 46, anti-competitive behavior and any other violations of the EPIRA and its implementing rules and regulations (IRR) can be penalized by the ERC with fines ranging from P50,000 to P50 million. Price control measures may also be undertaken.
The tripartite committee composed of the ERC, PEMC, and the Department of Energy (DOE) will convene immediately to discuss additional safeguards to avert price or market manipulation.
"Rest assured that the ERC will strictly follow its mandate of monitoring and preventing market power abuse and anti-competitive behavior equally, to guarantee the success of a restructured electricity industry," Albano said.
Meanwhile, PEMC said it has adjusted prices for the third and fourth trading months covering the periods Aug. 26 to Sept. 25, 2006 (from P4.85 per kwh to P3.22), and Sept. 26 to Oct. 25, 2006 (P6.77 per kwh to P3.09 per kwh).
This means the lower prices will be the ones that would be implemented and passed on by Manila Electric Co. (Meralco) to its consumers and not the higher prices which were subjected to alleged price manipulation.
The third trading month at WESM was a subject of investigation of PEMC when trade offers started to increase at noticeable levels.
As PEMC reported an "anomaly" might have happened at the said period, its board has ordered to revert or directed the application of administered prices in response to the outcome of the investigation conducted on the anti-competitive behavior and abuse of market power by the PSALM in the third month of the WESM.