Impose price cap on WESM on alerts—groups

Following the declaration of yellow and red alerts over the Luzon grid in the past few seeks, a top official of a consumer group has called on the Energy Regulatory Commission, the Department of Energy, and the operator of the wholesale electricity spot market to impose a price cap.

Impose price cap on WESM on alerts—groups
RED ALERT. Senator  Sherwin Gatchalian, Senate Chairman Committee on Energy with Rep. Carlos Roman Uybarreta,  vice-chairman of the House  committee on Energy field questions to DOE Undersecretary Felix Fuentebella and DOE Assistant Secretary Redentor Delola during the Senate’s public hearing on the recent spate of power outages in luzon after the national Grid Corporation of the Philippines placed the Luzon grid on ‘red alert’ due to the simultaneous shutdown of five power plants. Lino Santos
In a position paper issued even before the Senate Energy Committee meeting set April 25, Laban Konsyumer president Vic Dimagiba  urged regulators to issue an order to “stay WESM prices at pre-red/yellow alerts.”

“I also suggest and recommend that the regulators follow the money trail. Who are the suppliers that are taking advantage of the supply deficiency. Industry should be transparent. Consumers have the right to know what is happening to the grid,” Dimagiba said.

Dimagiba said that Chapter 6 of WESM Rules, allows the spot market operator under certain conditions to implement market suspension and impose an “administrative price cap” to assure price behavior to be approved by the ERC.

Citing the weekly summary report of WESM for week 14 and 15 or from April 1 to 14, Dimagiba observed that the hourly profile of load weighted average prices for Luzon ranges from a low of P4,000 to a high of P38,000 pesos per megawatt hour.

“Surprisingly, the energy regulators are mum and have done nothing to use their powers under the WESM rules,” he said.

“The industry is fully aware that demand for power continues to grow in Luzon. Supply is not catching up. Not enough new power plants to meet growing demand and corresponding reserves,” he added.

Because of increasing demand but inadequate, he said consumers are now experiencing almost daily red alerts and rotating brownouts.

“The yellow and red alerts also cause spikes in prices, especially in the spot market. The committee must look into the bidding behavior before, during and after the yellow and red alerts to see who has been taking advantage of the supply deficiency at the expense and to the detriment of the consumers,” Dimagiba said.

Dimagiba also asked the ERC to act on pending petitions for the establishment of new power plants that will add capacity to the system.

“They cannot keep dragging and slow-footing, and allow the system to collapse due to indecisiveness. ERC has to step up now and decide now whether to reject or approve the power plants that will provide the necessary power supply in these times of red alert. It is their call whether they will approve or reject the power supply agreements but they have to decide now. Power industry investors should be allowed to move forward,” he said.

As this developed, consumers of Manila Electric Co. experienced two-hour rotating brownouts on Thursday, the second consecutive day of brownouts due to lack of generating capacity in the Luzon grid.

Meralco said areas affected by the rotating brownouts beginning 3:36pm area parts of Metro Manila, Manila, Caloocan, Malabon, Navotas, Quezon City and Las Pinas. Also affected are parts of Bulacan, Cavite.

Meralco tapped participants of its interruptible load program to deload from the grid to free up additional capacity. ILP participants with capacity of around 235.52 MW had initially committed to operate their generating sets as support to the limited power supply.

The Luzon grid had been suffering from several yellow and red alerts since early this month due to insufficient power generation due to the unplanned and forced outage of power plants which coincided with the maintenance shutdown of other plants.

Grid operator National Grid Corp. of the Philippines placed the Luzon grid on yellow alert from 8am to 10am and 5pm to 6pm and 9pm to 11 pm yesterday.

It placed the grid on red alert from 10am to 5pm and from 6pm to 9pm as available capacity fell below the peak demand.

NGCP said it may implement manual load dropping which results to brownouts in different areas in Luzon such as parts of Cagayan, Sorsogon and Metro Manila.

Other areas that may be affected included Nueva Ejica, Batangas, Albay, Camarines Norte, Camarines Sur, Isabela, La Union, Tarlac, Quirino, Pampanga, Pangasinan.

According to data from the Department of Energy, several power plants continue to be offline T GN Power Mariveles Coal Power Plant (GMPC) Units 1 and 2 (690 MW) and SMC Consolidated Power Corporation (SCPC) Limay Coal Units 1 and 2 (300 MW) went offline due to the impact of the Luzon quake on Monday.

The Mariveles coal plants have yet to be restored but SCPC coal plants are expected to come online from April 25 to 27.

The Pagbilao Unit 3 of Pagbilao Energy Corp. is operating only at 210 MW out of its 420 MW total installed capacity due to an on-going assessment of the condition of their boiler while the Sem-Calaca coal plant remain derated to 200 MW from 300 MW due to “half condenser operation.”

Other plants were also on maintenance shutdown.

Senate panel looks into Luzon power outage.

As this developed, the Senate committee on energy on Thursday conducted a congressional inquiry into the recent spate of power outages in Luzon.

Senator Sherwin Gatchalian, committee chair, called for the hearing in view of the series of yellow and red alert warnings issued by the National Grid Corp. of the Philippines (NGCP) for the Luzon grid due to the simultaneous shutdown of five power plants.

In his opening speech, Gatchalian raised questions on the unexpected brownouts despite the forecast of the Department of Energy that there is ample supply of electricity reserve throughout summer.

He said the inquiry would identify the power outlook in the next few months, especially with the upcoming May elections.

“We want to be enlightened on the power situation on the coming elections, which is critical to our nation,” Gatchalian said

He said the committee would also look into the possible collusion among power producers due to thin electricity reserves in the midst of high demand. With PNA

Topics: Senate Energy Committee , Win Gatchalian , Energy Regulatory Commission , Department of Energy , Vic Dimagiba

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