Manila, Philippines – State-owned Power Sector Assets and Liabilities Management Corporation (PSALM) allegedly violated rules when one of its power plants failed to dispatch its energy load in the Wholesale Electricity Spot Market (WESM), thus resulting in the runaway hike in electricity’s generation charges.
Energy Secretary Carlos Jericho Petilla admitted this at yesterday’s continuation of the oral arguments on petitions to stop the implementation P4.15 per kilowatt hour rate increase as he revealed that PSALM violated the WESM rules as a result of Malaya thermal power plant’s failure to distribute its required electricity load in November, 2013.
It was said that the failure of Malaya to dispatch its energy load in the spot market resulted in the P62-per-kwh generation charge that led the Manila Electric Co. (Meralco) to charge an additional P4.15 per kwh in generation charges.
•‘Open Breaker’ Illegal
Grilled by Supreme Court (SC) Associate Justice Marvic Leonen, Petilla stressed that the “open breaker” status of Malaya thermal power plant is illegal and in violation of WESM’s rules on anti-competition.
A power plant set on “open breaker” mode means it was not synchronized with the electric grid.
Petilla explained that “the open breaker” status means that the (power plant) made an offer but when asked to dispatch it wasn’t able to do so. In the case of Malaya, Petilla said that the power plant is the only plant which got an open breaker status, meaning it cannot start, it made an offer but it’s not actually running.”
“Under the Rules, it is [in violation of the WESM rules] your Honor,” Petilla said in response to Leonen.
“During the preparation for the Malampaya’s shutdown, Malaya’s role was to be ready when needed,” the DOE chief added.
When asked to clarify if it is legal that there is a power plant that actually offers and yet keeps its open breaker status and therefore the offer is taken into consideration in the market but was not actually able to dispatch it, the official said it is illegal.
“It is not legal and it has been repeated by PSALM so many times. They have been behaving that way in the past four years,” he said adding it was repeated in November last year.
Petilla also admitted that the 600 megawatts of Malaya capacity was included in their forecast in the available supply in November.
When probed further by Leonen if it is not a violation of WESM rules, Petilla again answered in the affirmative.
“It is a violation, your Honor,” he added though he said he is not sure if it’s an outright anti-competitive behavior.
“I’m not sure about anti-competitive behavior, the reason that was given to us by PSALM is that it really cannot start, the only way it can actually dispatch is if it runs the entire plant without turning it off,” he added.
•DOE Defends ERC
Meanwhile, the Department of Energy (DOE) defended the Energy Regulatory Commission’s (ERC’s) decision to allow the P4.15/kwh rate increase as it maintains that consumers failed to question the power hike petition of Manila Electric Company (Meralco) before the regulatory body.
Assistant Solicitor General Vida San Vicente, who represents the DOE, told the magistrates that the ERC did not commit grave abuse of discretion when it approved the request of Meralco for a power hike.
Refuting the allegations of petitioners, San Vicente even pointed out that the consumers failed to contest such move of Meralco when the power firm asked for a rate hike application of P4.15/kwh to be staggered for three months last December 5, 2013.
At the time when the power firm filed a petition for a power rate hike, the government lawyer said no one went to the ERC to contest the automatic adjustment of November, 2013, generation cost under Section 43 of the Electric Power Industry Reform Act (EPIRA).
Under Section 4 Rule 5 of the ERC rule, a person may petition the commission for affirmative relief under any statute or other authority delegated to the commission, according to San Vicente.
“Petitioners should have availed themselves of the administrative remedy available to them by filing with the ERC an original petition under the ERC rules of practice and procedure contesting the adjusted generation rate,” she said.
She also rebutted the allegation of petitioners that the DOE and ERC committed grave abuse of discretion in approving the rate hike without publication of the adjustment in generation cost. source
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