THE
Department of Energy (DoE) said it had agreed with the Philippine Electricity
Market Corp. (PEMC) to allow power generation companies with expired
certificates of compliance (CoC) — including those with pending applications —
to continue operating and trading at the wholesale electricity spot market
(WESM).
“The move aims to
protect electricity consumers by preventing disruptions in WESM transactions
while the ERC (Energy Regulatory Commission) issue is being sorted out, “ DoE
Secretary Alfonso G. Cusi said in a statement on Sunday.
The resolution on the
agreement between the DoE and the board of directors of PEMC, the operator of
the spot market, is in line with Mr. Cusi’s pronouncement that he would not
allow any disruption in the country’s power supply.
The move
comes in view of fears about possible delays in the processing of CoC
applications with the ERC as a result of the suspension of four commissioners.
“The paramount
consideration is the overall protection of public interest and the security of
the supply of power. This is needed for the Philippines to meet its economic
targets. This should take precedence over administrative issuances especially
when an administrative body is unable to act,” Mr. Cusi said.
ERC
Chairman Agnes T. Devanadera did not immediately respond when asked to comment
on the DoE issuance. The DoE said it asked the Office of the President thrice
last year to give it supervision over ERC administrative matters.
In its statement
yesterday, the DoE said Mr. Cusi had directed PEMC and his department to work
closely with the ERC to ensure the continuing operation of existing plants and
to allow power generation from new plants that will be completed.
The CoC is proof that a
power plant complies with the applicable regulations clearing it as safe to
switch on and operate. Revised ERC CoC Rules of 2014 state that no person or
entity may engage in electricity generation unless it has secured a CoC from
the ERC to operate a generation facility.
Under the DoE-PEMC
resolution, which was approved on Thursday, power generation companies with
expired certificates can continue trading upon proof of submission of their
application for the renewal of their CoC with ERC.
“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,” Mr.
Cusi said.
He explained that the
certificate is a requirement for the registration and continuing participation
of generation companies in the WESM.
“About 26 generation
companies with a total of 3,314.60 MW generating capacities have expired or
have expiring CoCs in 2018,” he said.
“Additional new
capacities of at least 720 MWs are also expected to go into commercial
operation within the next few months. If not allowed to participate in the
WESM, the available electricity supply in the market will be curtailed, which
can result in higher market clearing prices,” he said.
Mr. Cusi said that as
the dry season approaches, the use of electricity is anticipated to increase.
He said the DoE “is monitoring the situation to ensure the sufficiency of
supply to meet the rising demand.”
The four ERC
commissioners, along with the previous ERC chairman, were ordered suspended for
one year by the Office of the Ombudsman in connection with the revised
implementation date of the competitive selection process (CSP), which it said
favored a few power supply contracts. — Victor V. Saulon
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