ERC orders SMC-tied power firm to explain alleged anti-competitive behavior

MANILA, Philippines – The Energy Regulatory Commission (ERC) has issued a show-cause order to South Premiere Power Corp. (SPPC), demanding an explanation for its alleged anti-competitive conduct in June 2022.

The order, issued on July 24, requires SPPC, a subsidiary of San Miguel Corp., to submit a verified explanation within 15 days of receipt, stating why it should not face administrative sanctions and penalties for allegedly violating the Electric Power Industry Reform Act of 2001.

The ERC’s move follows its evaluation of a report from the Philippine Electricity Market Corp. (PEMC), which found that the 1,200-megawatt Ilijan Power Plant was on “open breaker status” from June 5 to 25, 2022.

According to the ERC, this effectively disconnected the plant from the grid, preventing it from supplying power to the system.

PEMC’s report also noted that the disconnection coincided with a 30% spike in market prices and the declaration of multiple yellow and red alerts due to power supply deficiencies.

The ERC also issued a separate notice to PEMC, asking it to explain its actions surrounding the Ilijan incident.

The commission said that PEMC first notified the commission of a possible anti-competitive act by SPPC in September 2022, but later withdrew the notice for “finalization.”

Despite repeated requests from September 2022 to April 2024, PEMC submitted the final report only in May 2024.

"It was only in May 2024 that PEMC complied with the ERC’s written requests. PEMC then submitted a Market Surveillance Committee (MSC) Resolution dated August 11, 2022, endorsing a Notice of Possible Anti-Competitive Behavior (ACB) and recommending an investigation into SPPC-Ilijan," the ERC’s statement read.