The Philippine Competition Commission (PCC) has cleared the sale of PSALM’s Caliraya, Botocan and Kalayaan hydroelectric power plants to Aboitiz Group unit Cleanergy 9 Power Inc., but only after imposing safeguards to prevent price increases and reserve shortages in the Luzon ancillary services market.

Citing a November 2025 decision, the PCC said Friday its review found that the transaction could strengthen the Aboitiz Group’s already dominant position in regulating, contingency and dispatchable reserves in the Luzon grid, raising risks of higher prices and constrained capacity during a transition period.

The assets involved—the Caliraya Hydroelectric Power Plant, Botocan Hydroelectric Power Plant and the Kalayaan Pumped Storage Power Plant (KPSPP)—currently provide significant reserve capacity to the grid. 

PSALM is a major market participant through these facilities, while the Aboitiz Group holds the largest market share in the Luzon ancillary services market.

“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.

During its Phase 1 review, the PCC identified concerns over the ability and incentive of the Aboitiz Group to unilaterally raise prices and limit reserve capacity during the interim period before the implementation of an Energy Regulatory Commission (ERC)-approved tariff for KPSPP. This interim period may run for up to two years from the effectivity of the Department of Energy (DOE) Circular No. DC2025-04-0006, or until the second quarter of 2027.

To address these risks, the Aboitiz Group submitted voluntary commitments that were accepted by the PCC. These include filing a complete tariff application for KPSPP with the ERC within prescribed timelines, including an application for provisional authority or interim relief, as well as commitments on pricing and capacity allocation for reserve offers in the Wholesale Electricity Spot Market in the Luzon grid.

The PCC also required the appointment of a senior competition compliance officer within 15 business days of approval to monitor compliance with the commitments, oversee reporting obligations, and serve as the Commission’s primary liaison.

The commitments take effect upon PCC clearance and will remain in force until Cleanergy implements an ERC-approved KPSPP tariff. The undertaking includes penalties for non-compliance, 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 has been certified by the DOE as an Energy Project of National Significance.