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ERC eyes violation of six gencos

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The Energy Regulatory Commission (ERC) said Thursday it is investigating six generation companies for possible violations of outage allowances.

The ERC said it called on the six companies, which it did not name yet, to provide more information on the recent outages of their power plants.

The move is part of the agency’s efforts to investigate the red and yellow alerts in the Luzon and Visayas grid in April.

It expects to have preliminary findings by the first week of May to determine whether show cause orders (SCOs) need to be issued to the relevant stakeholders.

“While we are completing our investigation on the outages, we are not losing sight of the fact that consumers – households and businesses alike – will bear the brunt of unavailable supply and/or high WESM (Wholesale Electricity Spot Market) prices,” ERC chairperson Monalisa Dimalanta said in a statement

“That is why, early on, we have emphasized to distribution utilities the importance of contracting for power supply to at least avoid exposure to price spikes in the WESM. We have also facilitated the registration of solar-powered facilities for those consumers that have the ability to self-provide their own power requirements. All these efforts contribute to preparing for these eventualities,” Dimalanta said.

The ERC imposed P60 million in penalties on 14 generation companies in 2023 for breaching the allowable number of outage days.

Around 95 generation companies remain under investigation for exceeding the outage allowances under ERC Resolution No. 10, series of 2020, to determine if these outages are justified or excused under the regulation.

“The Commission is diligently studying additional measures we can put in place under this extraordinary increase in demand, as a result of the effects of El Niño, and unavailability of supply or reserves”, said Dimalanta.

The ERC has also been monitoring the prices in the WESM over the last 10 days, as the thinning of reserves is aggravated by record-high demand driven by dangerously high heat indices.

Data on the WESM shows that the average prices for Luzon have increased by 47 percent in the week of April 15-21, 2024 compared to the average prices for the previous week of April 8-14, 2024.

However, the ERC said that when compared to data from previous years for the same period (i.e., April 15-21, 2022 and 2023), the average price reflects an increase of only two percennt compared to the average price from the same period in 2023, and a 47 percent increase from 2022.

The ERC said that as for the average WESM prices for Visayas, data shows that the average prices for April 15-21, 2024 reflects an increase of 14 percent compared to the prices in the week of April 8-14.

It said that when compared to previous years, the current average prices are consistent with those posted for 2023 but reflect a 13 percent increase when compared to the average prices from 2022 for the same period.


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