ERC sets new capacity ownership limits on GenCos

By Myrna M. Velasco – March 20, 2018, 10:01 PM
from Manila Bulletin

To prevent undue market dominance and abuses in the restructured electricity sector, the Energy Regulatory Commission (ERC) has enforced new capacity ownership limitation on power generation companies (GenCos) as well as control on dispatch call of the power facilities.

On a national scale, a GenCo must only own and have dispatch control for up to 5,466.779 megawatts (MW), out of the country’s total installed capacity of 21,867.117MW.

That has been anchored on the 25 percent national-level market ownership cap prescribed for GenCos under Section 45 (a) of the Electric Power Industry Reform Act (EPIRA), the law that enabled the overall restructuring of the country’s electricity sector.

On a per grid basis, GenCos in Luzon can own up to 4,552.790 megawatts vis-à-vis the installed capacity of 15,175.967MW. Grid ownership and plant dispatch control reference is anchored on 30 percent limit against total installed capacity in that particular grid.

For Visayas grid, GenCo limits had been set at 958.466MW out of 3,194.888MW installed; and in Mindanao grid, that shall be at 1,048.878MW cap against installed capacity of 3,496.261MW.

The regulatory body noted that it has been updating the market caps on a yearly basis not just to comply with the law’s mandate but primarily “to prevent a person, company, related group or independent power producer administrator, singly or in combination to own, operate or control more than 30 percent of the installed generation capacity per grid, and 25 percent of the national grid.”

ERC Chairperson Agnes T. Devanadera explained that “the setting of the installed generating capacity and the market share limitation – per grid and national grid, ensures consumer protection through the promotion of free and fair competition in the generation and supply of electricity.”

She similarly gave word that the ERC, being the industry regulator, shall “continuously monitor to ensure that no generation company or other entity violates or breaches the MSL (market share limitation) per grid and national grid.”

As mandated by law, capacity limits are to be set on or before March 15 each year, hence, generation company-players are decreed on their reports submission with a January 30 cut-off date annually.

In this year’s setting of capacity limits though, the ERC has not qualified yet how it has counted the capacities of GenCos, primarily those that are also exercising control over retail electricity supplier (RES) capacities.

Most GenCos are similarly engaged in the retail supply segment of the transformed power industry and they have previously manifested concerns on “possible double counting of capacity” if ERC would not be straightforward on its rules on setting the capacity limits.

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