With the Energy Regulatory Commission's (ERC) pronouncement that the increase in prices of electricity was a result of the refusal of certain power plants to offer capacity in the spot market, the Department of Justice (DOJ) today issued a statement that it will still continue its inquiry on the price hike last December 2013.
E.O. No. 45 series of 2011 created the country's first competition authority - the DOJ Office for Competition (OFC). It is tasked to investigate and prosecute all cases involving violations of competition laws as well as carry out market studies to guide industries and consumers.
"This is no doubt the start of a new direction by regulators to protect consumers, anchored on the basic tenets of competition law and economic justice," said Secretary of Justice Leila M. De Lima. "Our OFC will continue with its investigation bearing in mind its mandate to protect the interest of the consumers," she added.
The ERC Order said that the generation companies' violation of the WESM "Must Offer Rule" contributed to the tightness in supply. It added that the market is still dominated by only a few players or group of companies notwithstanding government's efforts to privatize its generation and transmission assets. This high concentration in the market may have negatively affected electricity prices. The Order highlighted that its issuance is "without prejudice to the results of the investigations into the possible culpability of any or all of the market participants."
"It is clear from the ERC directive that there is still a need to determine whether there was abuse of market power or any other form of anti-competitive behaviour in the electricity market. We must ensure that there is genuine competition among the firms so that they cannot individually or collectively dictate the price at the expense of end-users," said Assistant Secretary Geronimo L. Sy, head of the OFC.
It may be recalled that a complaint was filed with the DOJ-OFC by several concerned groups alleging collusion among industry players. The Supreme Court concluded a series of oral arguments in the cases filed by concerned groups Bayan Muna and NASECORE and extended the temporary restraining order earlier issued on 23 December 2013 for another period of sixty (6o) days or until 22 April 2014.