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ERC ‘misinterpreted’ message on price fix rule — Napocor

By Riza Recio

07/12/2007

Saying a letter it wrote to state power assets holding firm Power Assets and Liabilities Management Corp. (Psalm) was “misinterpreted” by regulator Energy Regulatory Commission (ERC), state firm National Power Corp. (Napocor) denied having a hand in manipulation of prices at the electricity spot market.

The ERC absolved Psalm from the price fixing charges hurled by wholesale electricity spot market (Wesm) operator Philippine Electricity Market Corp. on the state firm but the ERC issued a stern warning against Napocor which its investigations found to have written Psalm suggesting to fix electricity prices.

Napocor president Cyril del Callar said he will challenge the ERC’s findings but said the state firm will not appeal.

ERC, through a memorandum which Del Callar received yesterday, issued a “stern warning” against Napocor on the price fixing allegations.

ERC chairman Rodolfo Albano did not rule out quasi-judicial proceedings once the regulator receives a formal complaint against Napocor.

Del Callar told reporters Napocor will not seek a motion for ERC to reconsider its findings but said the state firm will seek clarification on the order.

“Napocor’s bidding activities in the Wesm are governed primarily by the policy of least cost to customers and consumers, and least loss to the government,” Del Callar said.

The rates used for pricing electricity for Wesm trading are within the bounds of the ERC-approved time-of-use (ToU) rates, he said.

Del Callar said he is not aware of the letter that ERC said indicated suggestions of market collusion “among the numerours communications that both agencies have done in the past.”

Del Callar said the ERC itself, in its findings on the price fixing charges, stated that “no person, individual, group or organization manipulated prices or abused market power.”

“We understand the ERC’s concern to assure the integrity and transparency of the trading markets and wish to assure them of our cooperation. Napocor is now reviewing the scope and style of its communications with Psalm to assure against anything that can be misinterpreted,” Del Callar said.