Thursday, January 16, 2014
Did Meralco Make Money Out From Php 62/Kwh Bidding at WESM?
The Energy Regulatory Commission (ERC), tasked to probe the possible collusion among power plants, is digging deeper into the Php 62 per kilowatt hour (kwh) bids of the Manila Electric Company (Meralco) at the Wholesale Electricity Spot Market (WESM) to determine if it profited from the transaction. This development surfaced after the ERC found out in its ongoing investigation that Meralco purchased electricity from Aboitiz owned Therma Mobile Inc. (TMI) at a contract price of only Php 8.65 Kwh. The WESM trading outcomes being scrutinized covered the supply months of Oct. 26 to Nov. 25 and Nov. 26 to Dec. 25, 2013. These periods overlapped with the shutdown of the Malampaya gas production facility, according to sources privy to the matter. Meralco has a Power Supply Agreement (PSA) with the TMI facility. Under this PSA, it's Meralco which has control over the use of initial 100 megawatts capacity contracted from the Aboitiz owned plant as well as on the bids or price offers made at the WESM. Data gathered from WESM operator Philippine Electricity Market Corporation showed at least 9 intervals wherein Meralco made price offers of Php 61.99/Kwh and Php 62/Kwh and these were upheld as clearing prices for some hours of for the billing cycle Oct. 26-Nov. 25 of 2013. The frequency of Meralco's high bids is more revealing in the Nov. 26-Dec. 25 billing period, with more than 60 intervals of cleared prices at Php 61 to Php 62 per Kwh for the TMI facility. ERC officials have indicated that an initial outcome of the probe maybe out of this week. ERC Commissioner Astirit had earlier told media that the Commission "has been evaluating the bidding behavior of 50+ trading participants". The probe she added, has been looking at 1,448 trading intervals. Aside from Meralco's price cap level bids for TMI, Limay and Bauang diesel plants also had recurrent high price bids, ranging from Php 30+ per Kwh and up to the price ceiling of Php 62 per Kwh.
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