Napocor: Price manipulation case already resolved

The National Power Corp. (Napocor) denied yesterday it was investigated for price manipulation, saying it was the Power Sector Assets and Liabilities Management Corp. (PSALM) that had been probed and eventually cleared by the state’s power rates regulatory agency.

Napocor, in a statement, said the Energy Regulatory Commission (ERC) found no evidence to justify the prosecution of PSALM and its officials for anti-competitive behavior.

The state-owned power firm also claimed that it was never the subject of any investigation for price manipulation at the Wholesale Electricity Spot Market or WESM.

ERC stated in an earlier ruling that “mere suspicions, however, cannot substitute for proof and the absence of proof to constitute a prima facie case against PSALM does not justify the conduct of formal proceedings against it.”

ERC stated that it “cannot simply rely on speculation, conjectures or guesswork, no matter how appealing, to establish the act or conduct of PSALM that amounts to anti-competitive behavior or market power abuse.”

“We have not received any official copy of the case filed by the group, but reading their statement on the filing, we would like to reiterate that the issue of price manipulation in the WESM two years ago has been resolved by the ERC, which ruled that there was not enough evidence to prove that such manipulation took place,” Napocor said.

“We would also like to point out again that it was not National Power that was the subject of the investigation but PSALM, which was eventually cleared of these allegations by no less than the ERC,” it added.

Napocor also stressed that it does not have the capability or the capacity to influence prices at WESM, or in the world market for coal or oil.

“Our existing capacity accounts for only about 20 percent. Other companies that have IPPs (independent power producer) account for even a bigger share. We are just a minor player in the WESM. In fact, in 2007, our rates to our customers have significantly decreased by P1.5867/kWh in the Luzon Grid, P0.5700/kWh in the Visayas Grid and P0.3440/kWh in the Mindanao Grid,” the statement said.

“These decreases are enjoyed by our customers like Meralco. However, they also get their electricity from other sources. That’s why consumers enjoy the benefits of our lower rates depending on how much electricity their distribution utility such as Meralco and electric cooperatives bought from Napocor,” it added.

The state-owned power generation company added that these decreases are over and above the mandated rate reduction of P0.30/kWh that Napocor grants household electricity users, as provided for in the Electricity Power Industry Reform Act.

“The decrease in rates resulted despite the continuous escalation in the prices of fuel in the world market, and the tightness in the supply of coal, which also drives prices up,” Napocor said.

“If we may reiterate, Napocor is very transparent in its operations, and it abides by all laws, statutes, orders and proclamations by the government. Anyone who is interested in our operations can either visit our website at www.napocor.gov.ph, or give us a call or visit our offices,” the statement

said.

“Of course, it also goes without saying that we will cooperate with any investigation or inquiry by a legitimate government agency regarding the allegations raised by the group,” Napocor said.