PCC Greenlights ABC Energy's Minority Stake in Alternergy Wind Projects

The Philippine Competition Commission (PCC) has cleared ABC Energy, Inc.’s acquisition of a 40% minority stake in Alternergy Holdings Corp.’s two wind power projects, noting that it does not limit competition in the generation and supply of renewable energy. In a statement on Tuesday, the antitrust regulator said the transaction “is not likely to result in a substantial prevention, restriction, or lessening of competition in the nationwide generation and supply of renewable energy.” The approved transaction covers ABC Energy’s 40% minority equity stake in Alternergy Tanay Wind Corp. (Alternergy Tanay) and Alabat Wind Power Corp. (Alabat Wind). Following the transaction, Alternergy Wind retained a 60% stake and will maintain operational control and management over both Alternergy Tanay and Alabat Wind. ABC Energy is a domestic holding company focused on energy-related investments. It is wholly owned by A. Brown Co., Inc., under Brownfield Holdings, Inc. Both wind energy entities had been wholly owned by Alternergy Wind, a subsidiary of Alternergy Holdings, before the transaction. “In evaluating the transaction’s impact on electricity generation, the PCC’s Mergers and Acquisitions Office (MAO) found that the nationwide market for non-auctioned renewable energy generation is highly fragmented across approximately 222 entities, with no single market participant holding more than an 8% share,” it said. The MAO also looked into the analyzed potential competition risks under government auctions, specifically the Green Energy Auction Program. It found that both Alternergy Tanay and Alabat Wind are awardees under the Green Energy Auction 2, whose output capacities are committed under 20-year Green Energy Tariff arrangements. This minimizes any potential competition concerns in future auction rounds. The MAO added that Alternergy Holdings maintains independent strategic and bidding conduct in future auctions. The competition regulator also ruled out vertical foreclosure risks in the supply of RE to retail electricity suppliers (RES). It noted that existing regulations cap an RES from sourcing more than 50% of its supply requirements from its affiliated generation companies. “This statutory ceiling limits the parties’ ability from diverting output exclusively to affiliated retail entities such as ALTER RES,” PCC said. Market competition is maintained by the existence of established power players and an expanding pipeline project of around 79 renewable energy plants slated for commercial operation beyond 2031. Under Republic Act No. 10667 or the Philippine Competition Act, the PCC is tasked with reviewing mergers and acquisitions to prevent market concentration that harms consumer welfare. The review of market transactions help ensure predictability, protect competitive market structures, and promote sustainable economic growth, especially in critical sectors like RE. — Beatriz Marie D. Cruz