The Philippine Competition Commission has cleared the sale of three major hydroelectric power plants from the Power Sector Assets and Liabilities Management (Psalm) Corp. to an Aboitiz Group unit, subject to binding safeguards to prevent price manipulation and capacity constraints in the Luzon power market.
In a decision dated Nov. 28, 2025, the PCC approved Psalm’s proposed sale of the Caliraya Hydroelectric Power Plant, Botocan Hydroelectric Power Plant, and the Kalayaan Pumped Storage Power Plant to Cleanergy 9 Power Inc., an Aboitiz Group subsidiary. The clearance comes with voluntary commitments designed to address competition risks identified during the commission’s merger review, particularly in the Luzon ancillary services spot market.
Aboitiz is a major player in the Philippine energy sector and holds the largest share of the regulating, contingency, and dispatchable reserves market in the Luzon grid. Psalm is also a significant market participant through the capacity provided by the Caliraya, Botocan, and Kalayaan facilities.
During its Phase 1 review, the PCC flagged concerns that the transaction could give the Aboitiz Group both the ability and incentive to raise prices unilaterally or constrain reserve capacity during a transition period. This interim period could last up to two years from the effectiveness of the Department of Energy Circular No. DC2025-04-0006, or until the second quarter of 2027, before an Energy Regulatory Commission-approved tariff for the Kalayaan facility takes effect.
To address these risks, Aboitiz submitted voluntary commitments that the PCC accepted. These include a requirement to file a complete tariff application for the Kalayaan Pumped Storage Power Plant with the ERC within prescribed timelines, along with an application for provisional authority or interim relief that would allow rates to take effect while the full tariff review is pending.
The commitments also cover pricing behavior and capacity allocation for offers in the reserve segment of the Wholesale Electricity Spot Market involving the Luzon grid.
To ensure compliance, Aboitiz will appoint a senior competition compliance officer within 15 business days of the PCC’s approval of the undertaking. The officer will monitor adherence to the commitments, oversee reporting obligations, and serve as the PCC’s primary liaison.
The commitments take effect upon the commission’s clearance and will remain in force until Cleanergy implements an ERC-approved tariff for the Kalayaan facility. The undertaking also provides for penalties in cases of noncompliance, a defined cure period, and safeguards against circumvention, in line with the Philippine Competition Act and PCC merger rules.
The Caliraya-Botocan-Kalayaan Hydroelectric Power Plant complex is certified by the Department of Energy as an Energy Project of National Significance.
“By securing targeted commitments in the Luzon ancillary services market during this transition, PCC is protecting consumers from undue price risks while ensuring reliability and fair competition,” PCC Chairperson Michael Aguinaldo said.
The PCC reviews mergers and acquisitions to ensure they do not substantially lessen competition. In doing so, it assesses potential effects on prices, supply, innovation, and consumer choice to safeguard consumer welfare and promote fair market conditions under the Philippine Competition Act.PR
