Power plant outages trigger collusion probe
Credit to Author: TYRONE JASPER C. PIAD| Date: Mon, 22 Apr 2019 16:30:23 +0000
Competition authorities are investigating whether power outages earlier this month were deliberately caused to drive up electricity prices.
“The recent spate of scheduled and forced outages in Luzon by different power plants has reportedly reduced power reserves, caused calls for red or yellow alerts, and induced rotating brownouts, which in turn sparked complaints from the public,” the Philippine Competition Commission (PCC) said in a statement on Monday.
“The PCC shall assess whether the recent power plants’ outages are manipulated to increase electricity prices or are valid unplanned breakdowns that affect supply conditions,” it added.
Rotational brownouts were implemented by utilities in Metro Manila and parts of Luzon on April 12 and 15 following a series of red and yellow alerts issued by National Grid Corp. of the Philippines, which initially cited low projected operating reserves that were exacerbated by unplanned power plant outages.
Five plants — San Miguel Consolidated Power Corporation Limay Unit 2, TeaM Energy Corp’s. Sual Unit I, Southwest Luzon Power Generation Corporation’s Unit 2, Pagbilao Energy Corp.’s Pagbilao Unit 3 and South Luzon Thermal Energy Corp.’s Unit 1 — were tagged by the Energy department as having implemented unscheduled shutdowns.
Around 1.38 million customers of Manila Electric Co., which services Metro Manila and nearby provinces, were reportedly affected by the power interruptions.
Anti-competitive or collusive behavior, the PCC warned, is punishable under competition law with fines of up to P250 million and prison terms of up to 7 years for responsible officials.
The antitrust body said it was looking for inputs from the Department of Energy (DOE) as the latter requires technical reports and conducts audits. Leads from the public and experts on the field will also be welcome, it added.
“While the PCC has primary and original jurisdiction over competition concerns, the antitrust commission acknowledges the technical expertise and regulatory functions of the DOE and the Energy Regulatory Commission (ERC) in overseeing the power industry,” the commission continued.
The PCC is also looking to ink a memorandum of agreement with DOE and ERC to further the monitoring of competition in the power sector.
An official of AboitizPower, which operates the Pagbilao plant, said the firm welcomed the antitrust investigation.
“If they are going to investigate, we welcome [it]. We believe that it is something that really needs to be clarified to erase speculations, perceptions about the market,” AboitizPower Chief Operating Officer Emmanuel Rubio told reporters at the sidelines of a stockholders’ meeting on Monday.
Representatives from the other companies were not immediately available for comment.
The PCC, a quasi-judicial body established in 2016 under the Philippine Competition Act of 2015, is tasked with reviewing mergers and acquisitions for possible adverse effects on competition and also initiating investigations into anti-competitive practices.
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