Manila Bulletin
by Myrna Velasco
June 20, 2014
Hydro power facilities, which are considered intermittent sources of supply for Mindanao grid, had been proposed to be exempted from penalty impositions on failing to meet prescribed “dispatch tolerance” as based on rules for the Interim Mindanao Electricity Market.
The proposal was integrated in the application of the Philippine Electricity Market Corporation (IMEM) for amended price determination methodology (PDM) for the Mindanao electricity spot market. This particular petition was scheduled by the Energy Regulatory Commission (ERC) for public hearing this July 3.
The market operator has cited the concerns of the Power Sector Assets and Liabilities Management Corporation (PSALM) for the Agus-Pulangui plants, as well as similarly-situated facilities, like the Sibulan Hydro of Hedcor, Inc.
PEMC emphasized that “due to their nature, intermittent generators are often unable to comply with the +/-3% dispatch tolerance and become liable for payment of RDCRA (resource dispatch compensation recovery amount) and penalties.”
The market operator thus noted that due to these circumstances, it was prompted to seek for exemption on penalty impositions for such types of power suppliers in the Mindanao market.
PEMC reiterated that “the imposition of RDCRA and penalties on intermittent generation in light of their technical inability to comply with the +/-3% dispatch tolerance may cause adverse financial effects on IMEM Resources of intermittent nature and will therefore be against the intention of IMEM to encourage the entry of supply investors in Mindanao.”
It explained that its subsequent move on supporting the penalty exemption for ‘intermittent generation’ had been anchored on a Circular issued earlier by the Department of Energy.
As laid down, the RDCRA shall “represent the payment due to an IMEM Resource, which was “instructed to run or increase its generation by the System Operator due to failure of certain IMEM Resources to provide their scheduled generation or due to increase in demand.”
Similarly, it must cover cost for resources that had been “bumped off due to over-generation of another IMEM Resource beyond its schedule.”
Beyond this plea for clearer rules on penalty imposition, PEMC’s revised PDM filing for IMEM has also been batting for better delineation of demand-side bidding parameters for the Mindanao market.
It qualified that “in the current process, the customer (in this case the distribution utility or the electric cooperative) may specify the quantity it wishes to purchase but has no input with respect to the IMEM day-ahead price.”
In the rules revision being pushed by the market operator, it was set forth that “if the customer is unwilling to be supplied at a price which is higher than it is willing to pay, the customer may curtail its consumption from the IMEM and/or withdraw energy up to its contract allocation.”
And if the customer exceeded its contract allocation, “then it shall pay the generator which produced the power at its bid price,” PEMC specified. source
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