ERC leadership vacuum heightens blackout probability in summer

Published January 16, 2018, 10:01 PM By Myrna M. Velasco

https://business.mb.com.ph/2018/01/16/erc-leadership-vacuum-heightens-blackout-probability-in-summer/

With 5,493.38 megawatts being forced out of the electricity system because of lacking licenses to operate and supply contracts, the country will be in for unwanted brownouts especially during the summer months.

This was sounded off by various stakeholders in a Senate hearing convened by the Committee on Energy, with the feared scenario triggered by a lingering leadership vacuum at the Energy Regulatory Commission.

According to the ERC, about 43 power plants have un-acted renewal applications for certificates of compliance (COCs) and that summed up to 2,977.89MW; plus there are new 47 power projects applying for COCs with a total capacity of 1,971.49MW.

Without COCs, power plants are not authorized to commercially operate and would not also be able to sell their capacity, even in the Wholesale Electricity Spot Market.

Senate Committee on Energy Chairman Sherwin T. Gatchalian similarly emphasized that there are 29 bilateral power supply agreements (PSAs) between generation companies and distribution utilities with aggregate capacity of 544MW that are due to expire.

“We were asking for contingency measures of the DOE (Department of Energy)…what it will do because it will be critical in the next six months, especially during the summer season,” he said.

Energy Undersecretary Felix William Fuentebella indicated in the hearing that for those expiring PSAs, the DUs can procure supply from the WESM at the time that pending contracts cannot be approved yet by the ERC.

Nevertheless, the more problematic situation for the power industry would be the inability of power plants without COCs to contribute to electricity supply in the system.

With summer months just around the corner, Gatchalian assessed that the industry is now “running out of time,” hence, it is crucial that the appointment of officer-in-charge (OIC) Commissioners at the ERC be decided already by Malacanang.

On concern of supply availability, the lawmaker reckoned that the DOE must be able to present concrete facts as to which areas these power plants without CoCs are sited, so supply availability can be properly sorted out.

“According to the DOE, there is now a surplus of supply. The problem is, where is that surplus supply? We have to know the locations (of the plants) and the estimated surplus,” he emphasized.

ERC Chairperson Agnes T. Devanadera expressed optimism that the void at ERC’s leadership will be resolved soon, and such gridlock may not hopefully plunge the country into dreaded blackouts.

“Time and motion will dictate that the probability of a brownout, if it will happen. I believe that (the ERC leadership dilemma) will be acted upon. I trust in the wisdom of the President,” she stressed.

Energy Secretary Alfonso G. Cusi, for his part, has indicated that the energy department “has been pushing for reserve capacities for possible contingencies.”

He added “this will ensure an uninterrupted power supply at all times for power security and reliability,” adding that “we are certain that we can overcome this recent challenge to the energy sector.”

For the Philippine Independent Power Producers Association, Inc. (PIPPA), it reiterated that “without a working Commission and putting a pause on the important work of the ERC, we will find ourselves without the needed approvals for PSAs, connection agreements, price determination regulation, compliance certificates, and licenses.”