Antitrust body sets safeguards for Aboitiz CBK deal
The Philippine Competition Commission (PCC) has imposed safeguards on the sale of the Caliraya-Botocan-Kalayaan (CBK) hydroelectric power plants to a unit of the Aboitiz Group.
The PCC has cleared the deal but said it carries risks to competition in the ancillary services market in Luzon.
On Friday, the PCC said the safeguards were needed given Aboitiz Power’s dominant position in the Luzon reserve market. They are also necessary given the scale of capacity being acquired from the Power Sector Assets and Liabilities Management (Psalm) Corp.
Among the concerns that the Commission raised are potential unilateral price increases or constrained reserve capacity. This is a worry particularly during the interim period before the Energy Regulatory Commission (ERC) has approved a new tariff schedule for the Kalayaan Pumped Storage Power Plant (KPSPP).
The interim period runs until the second quarter of 2027.
To address these risks, the PCC required Aboitiz to file a complete tariff application for KPSPP within the timelines that the Department of Energy set. This includes applications for provisional authority or interim relief from the ERC.
The Aboitiz Group also committed to pricing and capacity allocation limits in its offers to the reserve segment of the Wholesale Electricity Spot Market for the Luzon grid. These cover regulating, contingency and dispatchable services.
In terms of compliance, the PCC noted that the Aboitiz Group has appointed a senior competition compliance officer within 15 days of the approval, last Nov. 28. The officer will monitor compliance with the commitments and oversee reporting.
