P56-billion MGen coal plant in Mauban still lacks requirements, can’t get COC yet, says ERC

By Lenie Lectura – September 24, 2019
from Business Mirror

THE Energy Regulatory Commission (ERC) on Monday said it could not yet issue a certificate of compliance (COC) to a project of the power generation arm of the Manila Electric Co. (Meralco) due to incomplete requirements.

The agency said Meralco must first comply with all the necessary documents and permits in order to secure a COC.

“The Epira [Electric Power Industry Reform Act] has specified the necessary clearances that generation companies [gencos] must secure prior to the ERC’s issuance of COCs.  Unless all the documentary requirements have been fully complied with, only then we can issue the corresponding COC,” ERC Chairman Agnes VST Devanadera said.

The Epira mandates new generation companies to secure a COC from the ERC before its commercial operations, provided that generation companies have also obtained the necessary health, safety and environmental clearances from the appropriate government agencies.

The ERC statement comes on the heels of a report by Meralco President Ray Espinosa to the Department of Energy (DOE) about a possible tight supply next month because a number of power plants are on scheduled maintenance shutdown.  More important, a new power plant of Meralco PowerGen Corp. (MGen) will not be able to deliver power to the grid this month because the ERC has yet to issue the COC.

The country’s first coal-fired power plant to use supercritical technology is being undertaken by San Buenaventura Power Ltd.(SBPL), a partnership between MGen and New Growth BV, a wholly owned subsidiary of Electricity Generating Public Co. Ltd. of Thailand.

The P56.2-billion coal plant in Mauban, Quezon, was earlier tracking a commercial operation date last September 15.

The ERC, however, raised questions on the water rights accorded by the National Water Resources Board (NWRB), Espinosa said.

When sought for comment, MGen President Rogelio Singson said Monday the company has fully complied with all requirements. “As far as we are concerned, we have complied with any deficiencies and the issue is now between NWRB and ERC,” said the MGen official.

The SBPL power plant will play a crucial role as electricity demand grows, especially in Luzon which accounts for about 70 percent of the country’s gross domestic product.

The electricity to be generated by the plant will be sold to Meralco, the country’s largest distribution utility, under a 20-year power supply agreement.

“We welcome the entry of new power plants as these will augment and ensure the sustainability of power supply.  However, we will not allow the stakeholders to breach the law, and the rules that we have promulgated as they were designed to ensure that the consuming public’s interest is not compromised,” Devanadera said.

Under the Revised Rules for the Issuance of COCs issued by the ERC (Resolution 16, Series of 2014), the Commission has 60 calendar days to act on applications for COCs reckoned from the date of complete submission of the required information, including the completion of the ERC’s technical inspection of the power plant.

Also, the ERC said it will ensure that the distribution utilities (DUs) that entered into a power supply agreement (PSA) with a generation company has opted for the least cost offer during the bid process.

“At the moment, we cannot as yet determine or confirm whether the proposed rate in the Meralco PSA adverted to was indeed the least cost.  But once the subject Meralco PSA application has been filed, the ERC will conduct a thorough evaluation to ensure that the proposed rate in the PSA is the least cost,” Devanadera said.

The Supreme Court affirmed its decision in July 2019, requiring all PSAs submitted to the ERC from June 30, 2015, to undergo the competitive selection process (CSP).

Meralco has so far successfully conducted two CSPs.

“We will require the submission of pertinent documents from the distribution utilities that will show proof that the CSP that they have undertaken in securing their power supply from the generation companies adhered to the ‘least cost’ principle,” Devanadera said.