Published January 28, 2018, 10:00 PM
By Myrna M.
Velasco
With the absence of a functioning
regulator in the restructured electricity sector, new power plants coming on
commercial stream will be clobbered in their effort to recoup viable investment
returns, but Aboitiz Power Corporation indicated this early they are amenable
to a “deferred cost recovery.”
When asked on this probability,
Aboitiz Power President and Chief Operating Officer Antonio R. Moraza asserted
that “it’s allright, we will just have to apply (for cost recoveries) later on.
That’s what I think would occur.”
The Aboitiz group is also amenable
to the issued resolution of the Department of Energy (DOE) and the board of the
Philippine Electricity Market Corporation (PEMC) to allow new power plants with
pending applications for certificates of compliance (COCs) to momentarily trade
and offer their capacities in the Wholesale Electricity Spot Market (WESM).
But while that sits well with the
Aboitiz group, this is not coming as a comforting precept to other industry
players, especially those that had already been ‘burned’ with such type of
arrangements in the past. A COC is basically the power plant’s license to
operate commercially – that will then allow it to offer its capacity in the
spot market and prudently recover costs, as that has a signal tie-in also to
the enforcement of the power supply agreements (PSAs), although the latter are
still approved separately by the Energy Regulatory Commission (ERC).
The COC is typically applied for and
approved by the ERC, but with the suspension of four of its Commissioners, the
regulatory body can no longer hold Commission meetings to approve the COCs of
power plants.
On ERC’s account, the void in
regulatory leadership will affect petitions for COC renewal of power plants in
aggregate capacity of 2,977.89 megawatts, as well as new COC applications of
1,971.49MW – enough to trigger artificial yet massive shortfall in power supply
if not acted upon expeditiously.
For the Aboitiz group alone, new
power plants that could be affected will be in the order of 600MW – for its
200MW capacity share in the Pagbilao plant expansion; 340MW in the Toledo plant
in Cebu; and 68.8MW Manolo Fortich hydropower plant in Bukidnon.
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