DOE’s Cusi adopts ‘carrot and stick’ tack to keep tab on power facilities

By Lenie Lectura – June 7, 2017

from Business Mirror

The Department of Energy (DOE) released on Wednesday a circular that formalizes the conduct of performance assessment and audit for all power generation, transmission and distribution systems and facilities.

DOE Circular  DC 2017-05-0008 states that “all generation companies, transmission service provider and distribution utilities shall be subject to a performance assessment and audit once every three years, or as may be directed by the DOE”.

Among others, the results of the audit shall serve as a DOE tool for the assessment of the overall performance of the electric power industry, thereby paving the way for policy development vital in the attainment of a secure, reliable and affordable supply of electric power to support the economic growth of the country.

The circular comes after a year since Energy Secretary Alfonso G. Cusi assumed post and made public his intention to conduct an audit following the frequent yellow- and red-alert incidents between July 25 and August 5 last year.

The circular also mandates the creation of the power transmission and distribution performance assessment and audit task forces. However, the DOE may consider tapping an independent third party, and performance assessment and audit firms.  “The DOE shall develop procedure on the accreditation or engagement of an independent third-party auditor,” the circular added.

Sought for comment on the issuance of the circular, Cusi said that when he assumed office last year, the agency did not have much information on how the different power facilities were operating.

He also said there is a need to undergo retrofit of the existing power plants, particularly aging ones. “We would like them to adopt the new technology because the other plants, because of age, their efficiency, their capacity factor is very low already and that is costly to consumers.” Cusi proposed that the budget for the conduct of the audit will be sourced from the agency’s 2018 outlay.

The DOE is also considering recommending to the Energy Regulatory Commission the imposition of penalties to noncomplying participants. “Further the DOE shall develop an appropriate system of incentives and penalties on the performance of the electric power industry participants in line with the performance assessment and audit parameters as maybe  determined on subject issuances,” the circular said.