Probe power firms over suspicious outages–group

by Lenie LecturaAugust 5, 2016

from Business Mirror

Power generators are now in hot water following the outages in the Luzon grid, which prompted a consumer group to suspect cartel-like collusion to jack up electricity prices.

Power interruptions occurred on Friday in most areas being served by the Manila Electric Co. (Meralco), after the Luzon grid was placed yet again on red-alert status.

The Department of Energy (DOE) said these power interruptions need to be investigated, as they could be in violation of existing laws.

“In view of the recurring yellow- and red-alert status announced by the system operator, NGCP [National Grid Corp. of the Philippines] in the past few days, the DOE is now closely looking at the possible violations by these power utilities given the current energy situation,” Energy Secretary Alfonso G. Cusi said.

“These debilitating power interruptions are in total violation of the Epira [Electric Power Industry Reform Act],” the energy chief said.

NGCP placed Luzon on a yellow-alert status from 10 a.m. to 1 p.m. The alert status was later raised to red from 2 to 4 p.m. The grid operator then downgraded the alert status to yellow from 5 to 9 p.m.

A yellow alert is being issued by the NGCP when contingency reserve is less than the capacity of the largest synchronized unit of the grid. In Luzon this is equivalent to 647 megawatts (MW), or one unit of the Sual power plant.

A red alert, meanwhile, means that there is severe power deficiency. Meralco announced before noon on Friday a two-  to three-hour power interruption brought about by zero power reserve.

The areas where power outages occurred are some portions of Cavite, Batangas province, Quezon province, Laguna, Quezon City, Las Piñas, Manila, Valenzuela, Rizal, Makati, Marikina and Pasay City.

“Manual Load Dropping, with two to three hours of rotating brownouts, was implemented starting 10:41 a.m.,” Meralco Spokesman Joe Zaldariaga said, adding that for Meralco alone, it recorded a “350-MW to 400-MW deficiency.” Meralco utility economics head Lawrence Fernandez said it secured commitments from 192 participants of the Interruptible Load Program, equivalent to a deloading capacity of 370.55 MW.

NGCP, for its part, said it will continue to monitor the situation and immediately issue a notice if the yellow-alert status will persists over the  weekend.

Cusi said Friday’s power situation was “due to four plants going down and six plants under scheduled maintenance.”

Meralco, meanwhile, said the zero power reserve was brought about by the “tripping of Calaca [300 MW] at 2:18 p.m. today.” Also, “based on NGCP’s advice, Malaya 1 was unable to synchronize due to fuel oil heater tube leak.”

Moreover, the utility firm said “the derated plants, such as the Malaya 2 [280 MW] and the Calaca 1 [156  MW],” contributed to the power deficiency experienced in Luzon. “The QPPL [Quezon Power  Philippines  Limited Co.] also experienced a reduction of load,” Zaldariaga added. Cusi was expected to meet Meralco and NGCP officials on Friday afternoon “to plan our course of action.”

The DOE chief reiterated that his office already requested the ERC to investigate these persistent power outages and to take appropriate actions, pursuant to their mandate to regulate industry players.

“I have also instructed the DOE  Power Bureau to conduct technical audits/plant inspections prioritizing those that have forced outages,” Cusi added .

Consumer group Citizen Watch called on the ERC to investigate what it described as “suspicious” trend of
simultaneous outages.

“Last week nine power plants in Luzon simultaneously shut down for emergency maintenance and several others operated on limited capacity, triggering a sharp increase in the prices of electricity and rolling outages across the region,” said Wilford Wong, Citizen Watch secretary-general.

The group noted that the closures immediately impacted the spot market, where prices surged following the thinning of supply.

“We are alarmed over this latest round of power-plant inefficiencies,” Wong said, citing similarly suspicious outages and shutdowns in November 2013 that drastically affected supply and consequently drove up rates, to the disadvantage of consumers who will bear the brunt of the increase. “We reiterate our call for a strict audit of the operational fitness of all existing power plants, which can serve as an accurate base of what is really the actual and dependable capacity in the grid,” he said.

“The information we need is not theoretical or on paper but the actual figures, which can be described as stable and reliable.” Wong warned that a scenario similar to the regular blackouts in the 1990s could be in the offing if these efficiencies are not addressed. “Our power prices can hit record highs again. On the long term we should ensure adequate and reliable new capacity to ensure economic growth and national development,” he said.

The group said the ERC must see if there is evidence of cartel-like behavior among the power-plant operations. If there is, the government must step in immediately to stop and prosecute the offenders, it said.