‘ERC’s year-end approval of PSA to lower power cost’

By Lenie Lectura -  November 19, 2019

https://businessmirror.com.ph/2019/11/19/ercs-year-end-approval-of-psa-to-lower-power-cost/

THE Energy Regulatory Commission (ERC) is expected to approve some of the pending power-supply agreements (PSA) applications next month.

According to Victor Dimagiba, president of consumer advocate Laban Konsyumer Inc. (LKI), ERC Commissioner Catherine Maceda, in a public consultation, had committed to the approval of the PSAs within the year.

“This is encouraging news hearing that the ERC will already act on the PSAs within the year, because this will mean additional power capacity to the grid as soon as possible.

“We hope that ERC will live up to its promise and commitment to already act on the PSAs and approve this much-needed capacity for the grid. The supply is important because this will mean reliable power at low costs,” said Dimagiba. If the PSAs are approved as soon as possible, such will mitigate increases in spot market prices as this would ensure entry of additional supply and reliable operation of power plants. “That is why we must fast-track the PSA approval,” said Dimagiba.

With additional capacity comes lower prices through a more competitive market and a more reliable grid as it will be less vulnerable to outages, Dimagiba explained.

“Reliable electric service starts with reliable power plants. A lower secondary price cap will not protect consumers from brownouts if multiple power plants go out simultaneously,” added the former trade undersecretary now consumer advocate.

LKI also demanded the results of ERC’s probe of collusion among power generation companies. “Where is the ERC’s promised report on the yellow and red alerts that plagued the Luzon grid last summer? Despite demand coming down from summer, the Luzon grid still experienced two ore yellow alerts in October and another last November 4,” he recalled.

“Which power plants went out repeatedly and caused the alerts? Are they going to be penalized? Where are the results of the ERC’s investigations on collusion?” Dimagiba wondered aloud.

The recently held publication was about the possibility of lowering the secondary price cap at the Wholesale Electricity Spot Market (WESM). Dimagiba said the move will just defer costs that will be paid by consumers.

“Any additional compensation will simply be recovered through future WESM charges and customers will still pay for unreasonable and persistent WESM price spikes. That is why we must fast-track the PSA approvals and begin building new power plants immediately,” he said.