GenCos with multiple plants are targets

By Myrna M. Velasco – April 23, 2019, 10:00 PM
from Manila Bulletin

The Department of Energy (DOE) indicated that the center of investigation on the alleged collusion of generation companies (GenCos) will be on the ‘bidding behavior’ and the level of revenue generation of the power firms with multiple electricity generating assets.

Department of Energy (DOE) logo

Department of Energy (DOE) logo

Energy Undersecretary Felix William B. Fuentebella told reporters that they have already collated the initial documents from the ‘yellow alert’ incidents in March supply month; but the department has yet to complete those for April incidents of both yellow and red alert circumstances in the Luzon grid.

On a positive note, Fuentebella indicated that they are expecting several generating facilities to be synchronized back to the grid today – including the Mariveles and Limay coal plants in Bataan.

With the plants getting back into the system, the energy department is expecting that power supply will likely improve starting Wednesday (April 24). The plants, he said, are targeted to be synchronized to the grid around Tuesday midnight.

“We are going to submit all our findings both to PCC (Philippine Competition Commission) and the ERC (Energy Regulatory Commission),” he stressed, adding that the market surveillance committee of the Wholesale Electricity Spot Market (WESM) already turned in the initial documents.

“What we are looking at – for example are those GenCos with conglomerates of plants,” he said, expounding that if a GenCo has a plant with scheduled maintenance and another power fleet suffered a forced outage, then the center of the probe will be on the bidding behavior that its other plants have been exhibiting at the spot market – and whether or not they have been gaining immensely financially on the other plants.

“We will look at the behavior of the other plants which are operating, for example plants C. D and E — if they are coming out with strategy to recover the losses from their other plants which are on shutdown and if these are being passed on to the consumers,” Fuentebella stressed.

Relating to the allegations of collusion, Energy Secretary Alfonso G. Cusi averred that “while we are currently investigating the matter, it is highly inappropriate for us to comment, make assumptions or speculate on the causes of what we think is an extraordinary occurrence.”

The energy chief admitted “there are no quick fixes to such incidents,” as he gave word that the department “is continuously finding ways to prevent a similar incident from happening again.”

Cusi said it remains a puzzle why the brownouts happened “despite having an excess of 1,131 megawatts over peak demand,” although he qualified “the unfortunate unforeseen shutdowns of several plants at the same time resulted in 1,502MW loss of available capacity.”

He thus asserted “the brownouts experienced by electricity consumers in certain parts of Luzon on April 11 and 12, 2019 are deeply regrettable, and we apologize for the inconvenience caused.”

On Tuesday as an aftermath of the earthquake that struck Luzon, the country’s major power grid was placed on ‘red alert’ condition again because some plants were on shutdown following the calamity.

The grid was placed on red alert from 10am to 4:00pm, but due to cooler weather temperatures, there had been no manual load dropping or rotating brownouts enforced.

According to the National Grid Corporation of the Philippines (NGCP), it observed a demand decline of 200 megawatts because of “cloudy weather condition’ plus the sudden ‘no work declaration’ in government offices contributed to lower electricity consumption during the day.