THE Energy Regulatory Commission (ERC) close to concluding its investigation of the 17 power generation companies (gencos) earlier found to have breached their plant outage allowance, causing the unscheduled brownouts from May 31 to June 3.
ERC Chairman Agnes Devanadera told the Senate Energy Committee on Thursday that her office has already evaluated the gencos’ explanations following the show-cause orders issued on June 22.
“We have already evaluated their explanations, [most] are mere allegations not supported by documents. We asked them to support their allegations. It’s really moving and we’re looking also [at] how they complied or did not comply with the performance indices,” said Devanadera.
Her office now awaits data from the Independent Electricity Market Operator of the Philippines (Iemop) to complete its review. Iemop is the operator of the Wholesale Electricity Spot Market (WESM).
Iemop had said that WESM prices more than doubled in May to an average of P7.72 per kW from P3.85 in April, mainly due to a surge in demand and thin supply brought about by plant outage incidents. Given the sustained high prices, the secondary price cap (SPC) was imposed last May 7 and May 20 to 22. The SPC was again implemented on May 31 to June 2 as the Luzon grid continued to suffer from thinning reserves due to plant shutdowns and higher electricity demand.
“On the part of those findings by the market operator [IEMOP], while we have some data submitted to us, we have to wait for end-June for some more data because every end of the month they have to do the settlement. That’s very important and crucial for ERC’s evaluation,” Devanadera explained to senators.
The ERC is also looking into the possible collusion by gencos whose facilities were on extended shutdown—including those that performed unplanned maintenance that led to rotational brownouts in Luzon last month.
“We will be looking into the relationship between those on outage and those we call highest gainers. So, we have to make a real meticulous analysis on data as to which affiliated with one another. These are vey important data. I can’t just say there were anti-competitive practices. We really have to go into these details that’s why we are waiting for some more data,” said the ERC chief.
The DOE earlier said gencos that reported prolonged plant outages could face charges of anti-competitive behavior and economic sabotage for violating government-enforced laws and policies.
Gencos, except for those operating hydroelectric power plants, are not allowed by the DOE to conduct power plant maintenance during the peak quarter. Also, the ERC has put in place a cap on annual unplanned outages per generating plant technology in order to promote accountability of gencos.
But based on ERC’s monitoring, the 17 gencos have breached the maximum allowable unplanned outage days for 2021.
The Philippine Independent Power Producers Association Inc. (Pippa) insisted at the hearing that they are not involved in any price fixing nor would they deliberately go on shutdown. The group stressed that it makes no sense to intentionally put a plant in outage because it would then have to buy at high prices to fulfill its contracted commitments.
“It is a disincentive for us. As much as possible, we want the plants to keep on running,” said Pippa president Anne Montelibano.
Atty. Jay Layug, president of Developers of Renewable Energy for AdvanceMent (DREAM) Inc. and also former DOE Undersecretary and former chairman of the National Renewable Energy Board, stressed that gencos will suffer if their plants are not operational. “At the end of the day, we are not the culprit. In fact, we provide electricity to consumers. There is no business reason for a power plant to intentionally shut down, malulugi sila pag hinde tumakbo [they will lose if these don’t run]. It is not a smart move to do that.”
Pippa said one of the best solutions to supply and reserve problems at the Luzon grid is to fast-track power projects to ensure that available power plants can be dispatched at full capacity.
As of June this year, 10 power plants with a total capacity of 1,154.6 megawatts (MW) are scheduled for testing and commissioning. But the permitting process is delaying the actual commercial operations of these plants. Bulk of these permits are pending with the DOE.
GN Power Dinginin Unit 1 has been delayed five times already. Its original commercial operation (COD) date was March 2019. The second unit is already four times delayed as its CPD was supposed to be in January 2020.
Other delayed power projects include biomass power plants, hydro plants, and solar power facilities. The reasons for delay range from delays in permitting to line transmission constraints.