Published
By Myrna Velasco
To avert a possible
power shortage during the summer months, the Department of Energy (DOE) has
allowed power plants without certificates of compliance (COCs) to operate and
sell their capacity at the Wholesale Electricity Spot Market (WESM).
“The Department of
Energy and the Wholesale Electricity Spot Market agreed to allow power generation
companies with expired COCs or with pending COC applications with the Energy
Regulatory Commission (ERC) to operate and trade in the WESM,” Energy Secretary
Alfonso G. Cusi said.
The decision was
anchored on Cusi’s “assurance that he will not allow any disruption in the
country’s power supply as a result of the delay in the processing of
applications before the ERC, including COC applications, due to the suspension
of its four Commissioners.”
Power plants, before
getting into commercial operations, are required to be thoroughly assessed and
validated on their technical compliance as well as on parameters of cost
recovery, because that will set the required level of reliability for the
country’s power system.
In the ERC’s process,
technical validation being done at power plants alone up to the completion of
documentary requirements and processes would take 2-3 months, hence, it
portends a not-so-promising summer months for Filipino consumers when it comes
to electricity supply.
Cusi said “the move
aims to protect electricity consumers by preventing disruptions in WESM
transactions while the ERC issue is being sorted out.”
He added that the
decision was arrived at in a Resolution that was cemented by the board of
directors of the Philippine Electricity Market Corporation (PEMC), the operator
of the electricity spot market.
“The paramount
consideration is the overall protection of public interest and the security of
the supply of power,” Cusi said, adding that “this is needed for the
Philippines to meet its economic targets.”
The energy chief
stressed that “this should take precedence over administrative issuances
especially when an administrative body is unable to act.”
Power plants with
2,977.89-megawatt capacity have to renew their permits to operate while those
with 1,971.49MW capacity have pending COC applications with the ERC.
It has been prescribed
under the Electric Power Industry Reform Act (EPIRA) and the corresponding
rules of the restructured electricity sector that if power facilities with
expired COCs will inject capacity into the grid so they can sell at the WESM,
they are liable for penalties.
Energy Undersecretary
Felix William Fuentebella argued that “old plants with expiring COCs are
supposed to file for renewal six months prior to expiration,” noting that with
that as a process, these COCs could already be “deemed approved, so there are
no penalties because these are deemed approved.”
He cited ERC Resolution
No. 16 series of 2014 as legal ground, which stipulates that “COC is deemed
approved when ERC fails to act on the same.”
He qualified though
that these are still up for validation. “What I am driving at is: We will look
into the details based on these rules and other options available under the
law.”
Fuentebella added the
DOE “will have to fill the gap from now until the new Commissioners come in.”
Under the DOE-PEMC
resolution, it was specified that “power generation companies with expired COCs
can continue trading upon proof of submission of their application for the
renewal of their COC with the ERC.”
Further, the department
emphasized that “new plants will also be permitted to trade or submit offers to
the WESM upon proof of completion of testing and commissioning and other
requirements for the issuance of a COC.”
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