ERC hikes capacity limits for gencos

Danessa Rivera (The Philippine Star) – March 18, 2018 – 12:00am

http://portal.jip.ph/erc-hikes-capacity-limits-for-gencos/

MANILA, Philippines — The Energy Regulatory Commission (ERC) has adjusted the capacity limits for generation companies in terms of output and market share for this year as part of its annual review to maintain a level playing field and foster competition in the power industry.

In a resolution, the ERC has updated the limit to 4,552.79 megawatts (MW) from 4,371.29 MW for the Luzon grid, 958.47 MW from 923.35 MW for the Visayas grid, and to 1,048.88 MW from 906.34 MW for the Mindanao grid.

For the three grids, the limits represent 30 percent of the total installed capacity in the grids. Luzon has an installed capacity which stands at 15,175.97 MW, 3,194.89MW for the Visayas and 3,496.26 MW for Mindanao.

The ERC also raised the limit on a nationwide basis to 5,446.78 MW from 5,167.48 MW, which is equivalent to 25 percent of the installed capacity of the national grid.

The limits set will be implemented until the next adjustment on or before March 15, 2019.

The adjustment is in compliance with ERC’s “mandate to promote free and fair competition in the generation and supply of electricity to achieve greater operational and economic efficiency and to ensure consumer protection and enhance the competitive operation of the markets for generation and supply of electricity,” the agency said.

ERC is mandated by Republic Act 9136 or the Electric Power Industry Reform Act of 2001 (EPIRA) to set the market share limitation per regional grids and the national grid to prohibit generation companies from owning more than 30 percent of the installed capacity of a grid and more than 25 percent of the installed capacity of the national grid.

Last year, the Senate committee on energy proposed to conduct a review on the market share limitation under EPIRA to reflect the true state and foster competition in the power generation industry.

Sen. Sherwin Gatchalian, the committee’s chairman, had said using the installed generating capacity as measure in computing market shares does not show the true dominance of a company in the sector, thus it needs to be revised.

In illustrating his point, the lawmaker said the share of coal in the country’s total installed capacity is approximately 35 percent but its share in actual generation is 48 percent.

As for natural gas, its installed capacity is only 16 percent but its actual generation is 22 percent.

Based on data gathered by the committee from the Department of Energy (DOE), the electricity industry shows the presence of dominant players and high retail rates, with almost 60 percent of the installed energy capacity controlled only by three firms.

At that time, Gatchalian said First Gen Corp. of the Lopez Group corners 19.63 percent market share, the San Miguel Group, 18.73 percent share and Aboitiz Power, 17.48 percent, totaling 55.84 percent for the three firms.

Other major players in the power generating sector are the Ayala Group with 5.5 percent, DMCI (5.07 percent) and the Manuel V. Pangilinan-led companies (4.94 percent).