PEMC welcomes SC ruling on PSALM petition

MANILA, Philippines — The Philippine Electricity Market Corp. (PEMC) has welcomed the Supreme Court’s ruling on the petition filed by the state-run Power Sector Assets and Liabilities Management Corp. (PSALM) against the corporation and the Energy Regulatory Commission (ERC).

“PEMC has gone through legal and political issues over the years regarding its status as the former autonomous group market operator and current governance body of the WESM (Wholesale Electricity Spot Market),” PEMC said.

“The Supreme Court has finally put all this to rest after it decided on a case filed in 2008 by PSALM,” it said.

The SC has denied a petition of PSALM against the ERC and PEMC for the legality of the latter’s function of meting out penalties on market stakeholders and participants.

In a decision promulgated on April 17, 2023, the SC stated that “the power to investigate violations of the rules is concurrently exercised by ERC and PEMC.”

“While the EPIRA states that the act of investigating and sanctioning breaches of the rules is a key function of the ERC, it does not mandate the ERC to perform this responsibility by itself hence, this function can validly be exercised concurrently by PEMC,” the SC said.

The SC ruling likewise affirmed PEMC’s role as the governance body of the WESM and its function as a private and self-governing entity.

The WESM is a centralized venue for buyers and sellers to trade electricity as a commodity where its prices are determined based on actual use and availability.

The ruling also provides the basis to exercise authority over the system operator, market operator, and market participants relative to the implementation and enforcement of WESM rules and manuals.

Further, it validated the procedures and delineation of authority exercised by the ERC and PEMC on the conduct of investigations, as well as the imposition of penalties and clarified jurisdiction and forum shopping issues.

The Court of Appeals had earlier denied PSALM’s petition for prohibition after PEMC formally started an investigation on the possible breaches of the WESM rules by six of its power plants in 2008.

PSALM elevated the case to the Supreme Court based on their interpretation that PEMC cannot encroach, usurp, intrude or assume the original and exclusive role of the ERC to act against any player or energy sector participant.

PEMC is a non-stock and non-profit corporation incorporated in November 2003 upon the initiative of the Department of Energy with representatives from the various sectors of the electric power industry.