Election-hitched plant shutdowns may trigger power rate hikes anew

By Myrna M. Velasco – February 12, 2019, 10:00 PM
from Manila Bulletin

The hitches to be triggered by the forthcoming May 2019 elections on the scheduling of power plant shutdowns in the country may spark off electricity rate hikes again for Filipino consumers.

As indicated by industry players, there are already requests from relevant government agencies to defer or re-schedule power plant maintenance schedules, to ensure that power supply will not be interrupted before and after the election period.

With that as a scenario, it is already anticipated that there will be months when the electricity system will suffer from tight supply conditions, and such could result in unprecedented spikes in pass-on electricity rates.

Similar to an election milieu in 2013 when a ‘perfect storm’ wobbled the entire Philippine power industry, the main triggering factor then had been the simultaneous shutdowns of power plants because they needed to move the downtime schedules of those that were originally slated immediately before and after the May elections that year.

At that time, most of the power plant owners and operators had to defer their maintenance schedules in the second half of the year – and the circumstances had been compounded by the scheduled shutdown of the Malampaya gas production facility around October-November then.

That industry upheaval six years ago was supposed to result in more than P5.00 per kilowatt hour (kWh) rate hikes in the bills of consumers from November 2013 to January 2014, but public uproar on the tragedy prompted the Supreme Court to order the electricity tariff increases to be shelved. The case remains pending until this time.

For this year’s election, alarm bells are being raised that a repeat of those ‘power sector mayhem’ of rate hikes and supply tightening may come about if the Department of Energy (DOE) and the industry players would not be prudent in the decisions relating to the maintenance shutdown of critical facilities in the power system – especially so since another Malampaya shutdown is also due in October this year.

Energy Secretary Alfonso G. Cusi indicated that power companies are being directed “to ensure availability of power generating units to meet demand and reserves in coordination with NGCP (National Grid Corporation of the Philippines).”

The energy chief reiterated that GenCos would need to “suspend preventive maintenance and testing of generating units one week before and after the election period.”

Cusi emphasized the power plants must also guarantee availability of ample fuel supply for their warranted electricity generation; and they must deploy back-up personnel and additional maintenance crew in their facilities to speed up repair and restoration processes in cases of emergency. For now at the very least, the Philippine Independent Power Producers Association Inc. (PIPPA) is assuring that “communication lines are being improved on how to adjust the arrangements and timelines on power plant downtimes.

“There are certain things that need to be fixed…there are some requests to ensure adequate supply, that there’s back-up and no fluctuations if ever,” PIPPA Managing Director Anne Estorco-Macias said.

She added “we try to improve on it,” with her emphasizing that coordination meetings with the energy department and other stakeholders like NGCP, power generation firms and the distribution utilities already started.

“We have all been talking. The DOE is making sure that we all coordinate, so we’re improving our communication lines,” Macias stressed.