ERC finds no sufficient evidence against PSALM

The Energy Regulatory Commission (ERC) found no sufficient evidence against the Power Sector Assets and Liabilities Management Corporation (PSALM) for anti-competitive behavior and market power abuse in its participation in the commercial operation of the Wholesale Electricity Spot Market (WESM) during the third billing month.

In its Order dated 06 June 2007, the ERC approved the recommendation of its Investigatory Unit (IU) to terminate the investigation on PSALM. “The IU found no prima facie case against PSALM for anti-competitive behavior or market power abuse and the ERC agreed, saying that it cannot rely on speculation, conjectures or guesswork to establish the act or conduct of PSALM that amounts to anti-competitive behavior or market power abuse, ” ERC Chairman Rodolfo B. Albano, Jr. said.

The IU’s report to the ERC stressed that it is speculative to conclude that because its three Trading Teams simultaneously offered similar offers of PhP10,000/MWh starting on 30 August 2006, PSALM already unduly influenced the submission of such offers and abused its market power.

Section 45 of the Electric Power Industry Reform Act (EPIRA) prohibits anti-competitive behavior in the WESM. The ERC is the administrative body empowered under Section 43 of the Act to monitor market behavior and penalize market power abuse. Pursuant to this, the ERC created the IU to carry out the preliminary inquiry into the allegation against PSALM.

“The ERC will remain steadfast on its duty to guard against market abuse and maintain fair competition in the spot market to ensure the supply of quality, safe and adequate electricity at reasonable prices to consumers while adhering to the tenets of fair play and justice,” Chairman Albano assured the public.

July 9, 2007