ERC to probe violations of 12 power plants

DOE Secretary Jericho Petilla. AP FILE PHOTO

Regulators are looking into possible violations of power market rules by at least 12 generation facilities, including the Malaya power plant of state-run firm Power Sector Assets and Liabilities  Management (PSALM), Energy Secretary Carlos Jericho Petilla said in a phone interview.

Petilla said the DOE had noticed certain trading slots in the Wholesale Electricity Spot Market (WESM) where there seemed to be less power-generation capacity offers than expected. One example, he said, was the 10 p.m. slot on Nov. 13, 2013, where some 2,300 MW of electricity was missing when comparing offers and expected available capacity.

ERC, which is conducting an investigation on electricity rate spikes during the Malampaya shutdown last year, is set to ask the plant operators concerned to explain their apparent failure to offer power-generating capacity at the time, Petilla said, since the DOE was sharing its findings with the quasi-judicial body

“It’s not that we are singling out any power plant, be it Malaya or any other. We are only saying Malaya and other plants failed to comply with real time and must offer rules, and this affects competition. They have the chance to explain, of course, since the investigation is ongoing,” Petilla said.

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PSALM, on the other hand, has bucked critics’ allegations that it caused the spike in power rates by not trading its capacity in the WESM during the duration of the Malampaya shutdown.

PSALM president and CEO Emmanuel R. Ledesma Jr. said in a statement Friday that other generation firms as well as distribution utility Manila Electric Co. (Meralco) were aware of Malaya’s situation and that the plant did not cause the record P4.15/kWh increase in power rates last December. As such, they should have made adjustments to try to manage power rates and should not put the blame on Malaya, Ledesma said.

Ledesma made the comments following hearings in Congress over the controversial power rate increase, where one of the touchy subjects brought up was the unavailability of Malaya during the Malampaya shutdown.

Market participants know of Malaya’s role as a must-run unit (MRU), called to produce only in cases of emergency. Ledesma said Malaya has operated upon the instruction of National Grid Corp. of the Philippines (NGCP) to prevent brownouts in case of insufficient supply or to provide grid voltage support in view of the proximity of Malaya to Metro Manila.

According to PSALM, since January 2010, Malaya has run only as an MRU for an aggregate period of 454 days. The WESM rules define an MRU as a generating unit identified by NGCP to be online on a particular WESM trading interval to address requirements for system security, which is the “safe scheduling, operation and control of the power system on a continuous basis in accordance with the system security and reliability guidelines under the Grid Code,” and other important considerations.