Some power generation companies that were issued notices of non-compliance by the Energy Regulatory Commission for longer unplanned outages beyond that allowed by government regulations are "members of an ‘old boys' club,” Bayan Muna party-list Rep. Carlos Isagani Zarate on Sunday said.
He said these are the same entities that shut down their plants, especially during summer time that resulted in rotational brownouts and spikes in electricity prices.
He said last June at the House committee on energy, ERC chairperson Agnes Devanadera admitted that for the period January to April, 35 generation companies (gencos) were issued notices of non-compliance, especially of the government’s policy of “no maintenance” or shutdown during summer that will result in a shutdown of power plants and the thinning of power supply.
He said the ERC chief admitted that only 15 of those sent notices have already complied with its directive.
“I was looking at the list provided by the ERC, and these are the same gencos that always shut down their power plants during summer time.
It's like they belong to the same ‘old boys' club’ that's shutting down their plants every summer,” he said.
He said Calaca 2, for example, was allowed unplanned outages of only 16.8 days, but has reached 113 days. Sual is allowed only 16.8 days but has reached 113 days of actual shutdown, Zarate said.
He urged the ERC to speed up its investigation.
“These are very long shutdowns. If this is going to recur, we hope to hear more from the ERC as the regulator. Devenadera knows that this is not new so they should have been able to already address this nagging issue by now,” he added.
Meanwhile, the ERC warned power rates will likely increase if the National Grid Corp. of the Philippines (NGRP) contracts ancillary services.
Devanadera said the agency is coming up with a study on ancillary services as the source of reserves.
"One alleged cause for the red alert is the manner of contracting reserve requirements. It is proposed that insufficient AS contributed to the red alert," Devanadera said.
Ancillary services are support services that are necessary to support the transmission capacity and flow of active power to maintain power quality and the reliability and security of the grid.
"That's the focus of the study now. We agree, AS can be something that can be useful now but where can we get that?" Devanadera said during a recent House of Representatives committee on energy hearing.
The Department of Energy wants NGCP to forge firm AS contracts to avoid future power outages and has come out with a circular for their compliance.
"It should be emphasized that in the current set-up, energy supply andAS comes from the same pool of generation plants," she said.
She said if a portion of the power supply is dedicated to AS, this could drive rates up.
Based on the ERC data, regulating reserves in Luzon will drive rates up to P0.404 per kilowatt hour from the current P0.2347 per kwh, contingency reserves will go up to P0.6216 per kWh from P0.0799 per kWh and dispatchable reserves to P0.4839 per kWh from P0.0694 per KWh.
Meanwhile, the Philippine Independent Power Producers Association, Inc. urged the government to encourage construction of more peaking power plants.
"We need to encourage more generating plants, especially peaking plants. Plants need to be built before the need arises. There should be policies to make it attractive and enter the market," PIPPA executive director Anne Estorco Montelibano said.
"A competitive environment in the generation sector would lead to more competitive rates, energy efficiency, security and reliability. Our the goal should always be to encourage more investments in the generation sector," she said.
Montelibano said no power generator wants to be on outage as it results in a loss of revenue.
"Our generators derive revenues when a plant is running or within its outage limit,” she said.
