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Monday, June 24, 2024

ERC tells distributors, generators to prevent electricity ‘bill shock’

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The Energy Regulatory Commission asked distribution utilities to stagger the anticipated bill shock amid the red and yellow alerts experienced in April that led to higher prices at the electricity spot market.

“Yes, we are appealing to the DUs to do it on their own. Because if they don’t do it on their own, then again, the regulator will be constrained to step in…So, we let the DUs with initiative to do it. We’re also appealing to the generators to also be receptive to these requests,” ERC chairperson Monalisa Dimalanta said in a briefing.

“For the summer period, we know that there is a semi-bill shock, if not total bill shock,” she said.

The National Grid Corp. of the Philippines placed the Luzon grid on yellow alert Thursday from 3 p.m. to 4 p.m. as around 1,369.3 megawatts of capacity remained unavailable to the grid.

A yellow alert is issued when the operating margin is insufficient to meet the transmission grid’s contingency requirement.

Dimalanta said consumers could expect higher prices at the Wholesale Electricity Spot Market (WESM) due to the tight supply conditions.

She said Luzon had 1,826 intervals where the secondary price cap was in place to mitigate the high prices at the WESM from April 15 to April 30.

“The mechanisms in the market were working at that time. So, the regulator should not be trigger happy where it intervenes in the market because there are mitigating mechanisms that should be able to address that,” Dimalanta said.

She said the ERC also balanced consumer against investor interest when it issued the temporary suspension during red alerts.

“We are not imposing this on a long-term basis. These are unusual circumstances, these are extraordinary circumstances, and the suspension will be kept at a minimum just to cover this extraordinary period,” Dimalanta said.

She said the diesel plants were forced to run during the period when the large hydropower, coal-fired plants and natural gas plants became unavailable.

“What entered and save the system to avoid a systemwide blackout are the diesel plants. We know that the diesel plants have high fuel costs. So, we have to pay them because they produced the electricity we needed,” she said.

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