The Energy Regulatory Commission (ERC) has ordered South Premiere Power Corporation (SPPC) to explain its disconnection of the 1,200-megawatt Ilijan Power Plant from the grid in June 2022. They cite concerns over possible anti-competitive conduct and violations of power market rules.

In a Show Cause Order (SCO), the ERC directed SPPC to respond within 15 days and justify why it should not face administrative sanctions under Section 46 of the Electric Power Industry Reform Act (EPIRA). The commission said the Ilijan facility operated under “open breaker status” from June 5 to 25, 2022, thus effectively isolating it from the grid.

The disconnection coincided with a significant surge in electricity prices, with rates in the Wholesale Electricity Spot Market (WESM) rising by more than 30%. It also occurred during a period of thin supply margins, when the Luzon grid experienced Yellow and Red Alerts due to tight reserves.

“The ERC views this matter seriously as it affects the integrity and competitiveness of the electricity market,” the Commission stated. It added that SPPC’s action may have violated market competition rules and potentially disrupted fair access to energy.

The ERC is also requiring the Philippine Electricity Market Corporation (PEMC), operator of the WESM, to explain the delay in the submission of its final investigation report. While PEMC flagged the issue in 2022, it only submitted its findings to the ERC in May 2024.

“Deregulation does not equate to freedom from rules,” said ERC Chairperson Monalisa Dimalanta. “Power generation may be deregulated, but it remains a public-interest business.”

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