The Market Monitor Minding the Nation's Business
The Philippine Competition Commission (PCC) has approved the sale of three power plants owned by the Power Sector Assets and Liabilities Management (PSALM) Corporation.
Changing ownership are the Caliraya Hydroelectric Power Plant, Botocan Hydropower Plant and Kalayaan Pumped Storage Power Plant (KPSPP) from PSALM to Cleanergy 9 Power Inc., which is owned by the Thunder Consortium comprised of Aboitiz Renewables Inc. and Japanese firms Sumitomo Corporation and Electric Power Development Co. Ltd.
The Commission assured that safeguards were instituted so that problems concerning competition in business are solved.
In a statement on Friday, the PCC said its clearance for the sale is subject to binding voluntary commitments designed to address competition concerns identified during the merger review, particularly in the ancillary services spot market of the Luzon grid.
During the initial review, PCC cited issues over the Aboitiz Group’s ability and incentive to raise prices unilaterally and limit reserve capacity during the interim period of up to two years, or until the second quarter of 2027, ahead of the implementation of an Energy Regulatory Commission (ERC)-approved tariff for KPSPP under a Department of Energy circular.
To address these, the Aboitiz Group committed to filing a complete tariff application for KPSPP with the ERC within prescribed timelines, including applications for provisional authority or interim relief.
The private entity also made “commitments on pricing and capacity allocation in relation to offers in the reserve segment of the Wholesale Electricity Spot Market (WESM) involving the Luzon grid,” the PCC said.
It added that to ensure compliance, Aboitiz Group will appoint a senior competition compliance officer within 15 business days of the approval to monitor adherence to the commitments, oversee reporting, and serve as the commission’s primary liaison.
“By securing targeted commitments in the Luzon ancillary services market during this transition, PCC is protecting consumers from undue price risks while ensuring reliability and fair competition,” PCC Chairperson Michael Aguinaldo said. (PNA)