ERC to pursue probe vs ‘erring’ gencos despite August power-rate slash

by Lenie Lectura - September 12, 2016

http://www.businessmirror.com.ph/erc-to-pursue-probe-vs-erring-gencos-despite-august-power-rate-slash/

THE Energy Regulatory Commission (ERC) will pursue its ongoing probe on generation companies (gencos), notwithstanding the power-rate slash during the period within which their power plants went offline last month.

“It depends on recommendation of the investigation committee. The impact could be insignificant, but baka may nakinabang, so you still have to pursue,” ERC Commissioner Alfredo Non said.

The probe of the gencos was prompted by the recent forced outages, which resulted in rotational brownouts in Metro Manila and nearby provinces between July 26 and August 5. There were a total of 20 plants that failed to deliver optimum power on those days because these were either on maintenance shutdown or forced outage. Of the 20 plants, 12 were placed on maintenance shutdown, while eight went on forced outage.

  These 20 plants were unable to deliver more than 4,000 megawatts (MW) of electricity. This prompted the ERC to require power-generation firms to submit a report on the causes behind these outages. These firms are being investigated by the commission if they were engaged in anticompetitive behavior.

The Manila Electric Co. (Meralco), however, announced lower power rates for September, despite incidents of frequent shutdown of power plants in Luzon last month.

The residential rate this month is down to P8.46 per kilowatt-hour (kWh), or lower by P0.0451 per kWh. The rate cut translates to a reduction of around P9 in the electricity bill of a household with monthly consumption of 200 kWh; P13.53 for 300 kWh; P18.04 for 400 kWh; and P22.55 for 500 kWh.

Meralco said the reduction was due to the downward movement in the transmission charge, which more than offset a higher generation charge.

Meralco noted a P0.0879-per-kWh increase in the generation charge to P3.94 per kWh.

  Cost of power from the independent power producers (IPPs) increased by P 0.17 per kWh.  This was mainly because of the reduction in the operating hours of Quezon Philippines Power Ltd. (QPPL), which went on forced outage from August 5 to 8, and First-Gas Santa Rita, with Modules 10 and 20 under scheduled maintenance on August 13 and 14, and the whole August supply month, respectively. The share of the IPPs to Meralco’s total requirements for the August supply month stood at 35.6 percent.

Overall charges from the Wholesale Electricity Spot Market (WESM) decreased by P0.32 per kWh. Spot prices went up, following the seven instances of yellow alert and three instances of red alert in the August supply month, versus just one instance of yellow alert during the July supply month.  However, this was more than offset by the reduction in the effective rate of line rentals and other charges, as the share of WESM purchases went up to 20.6 percent, from 9.5 percent the previous month.