DOE, PCC in tie-up to probe brownout mess, collusion raps

By Myrna M. Velasco – June 11, 2019, 10:00 PM
from Manila Bulletin

The ‘messy’ affair of the power sector in this year’s summer months had prompted the Department of Energy (DOE) and Philippine Competition Commission (PCC) to “break bread” and cement partnership not just in investigating the complex triggers of rotating brownouts and supply tightening but also the alleged collusion raps in the troubled paradise of the power firms.

The memorandum of agreement (MOA) was inked Tuesday (June 11) between PCC and the energy department; and the primordial goal of the tie-up, according to PCC Chairman Arsenio M. Balisacan shall be to “promote market competition and coordinate investigations in the power sector.”

Not be to sidetracked in this partnership, PCC said, is the probe it initiated in April intending to “look into allegations of possible collusion or abuse of dominance of certain power generators following simultaneous shutdowns that may have caused an artificial supply shortage and consequently a hike in electricity prices.”

Evidently though, the consumers had been shielded from feared rate spikes during the summer months due to factors, such as: the optimized bilateral contacting of servicing distribution utilities (DUs) and that the ‘cost of replacement power’ had been placed as cost burden of generation companies – hence, it had been the power firms losing money instead of the consumers shouldering higher electricity tariffs.

That was somehow one of the tough lessons learned in the electricity sector’s “perfect storm” episode in 2013; wherein consumers had been more exposed then to volatile prices in the Wholesale Electricity Spot Market (WESM); while for such similar industry spell this 2019, the outcome had been diametrically opposed as ratepayers had been spared from unwarranted price hikes. In the deal with DOE, Balisacan emphasized that the PCC shares with it “a common vision of a more robust competition landscape in the power industry.”

The competition commission expounded that it would be able to latch onto the DOE’s “technical assets and ensuring proper functioning of the energy sector.”

With such complementation efforts, Balisacan leans on a higher degree of confidence that “PCC’s own investigative capacity will lead to a stronger push for competition enforcement.”