Power spot prices soar after yellow alerts

By Myrna M. Velasco

As weather temperature rises, so as the electric bills of Filipino consumers given the series of yellow alerts straining the country’s main power grid in Luzon – and it is just the start of summer months.

power grid power grid

On Friday (March 8), Luzon grid had been shoved into its third round of “yellow alert” or that situation in the electricity system when there is already part of the power reserves that cannot be met or provided due to lack of generation.

And in essence, yellow alerts trigger supply tightening that could then subsequently drive up power rates – especially in the Wholesale Electricity Spot Market.

As gathered from WESM operator Independent Electricity Market Operator of the Philippines (IEMOP), the highest load weighted average price (LWAP) in the power spot market reached P11.53 per kilowatt hour (kwh) just in this week of “yellow alerts” or from March 4 to 7.

Within the period, the LWAP average hovered at P9.054 per kwh, which climbed by almost P3.00 per kwh than the daily average of P6.49 per kwh and way even higher than the February average of P4.23 per kwh.

The WESM-LWAP basically signifies the average price of electricity traded from various points in the electricity system and at different trading hours/intervals.

As of March 8 (Friday), system operator National Grid Corporation of the Philippines (NGCP) indicated that power reserves were still insufficient, hence, it declared another round of yellow alerts at 11:00 a.m. to 12:00 noon; and 2:00 to 3:00 p.m.

The plants on forced outages had gone leaner, but NGCP reported that the 59-megawatt Bacon-Manito (BacMan) unit 2 power plant of Energy Development Corporation (EDC) of the Lopez group had joined the fray.

The other generating facilities still on unplanned shutdowns were the 316MW GNPower-unit 2 of the Ayala-Aboitiz joint venture; the 300MW Calaca unit 2 power plant of the Consunji group; the 150MW unit 1 of South Luzon Thermal Energy Corporation (SLTEC) of the Ayala group. De-rated plants were still the same; the Masinloc generating units of San Miguel group; and the Pagbilao 3 power facility of the Aboitiz group and TeaM Energy Philippines.

The Department of Energy (DOE) does not see any problems with the series of yellow alerts plaguing the system; but other industry players worry of price spikes that may eventually torment consumers – and the others also see this as a cause of bigger concern in the country’s power supply-demand situation.

In Congress, there is a more intensified call for investigation of the recent unplanned outages of power facilities, as this might transpire as a déjà vu of the 2013 crisis in the power industry when consumers were supposed to suffer P5.00 per kWh hike in their electricity bills had it not been stopped by the Supreme Court.

In a statement to the media, Bayan Muna Representative Carlos Isagani Zarate said “more than 10 plants have shutdown – counting those that were de-rated. These shutdowns are too numerous and they will definitely cause a spike in power rates if we do nothing about it.

He noted that as of now, “the DOE is saying that their policy is to have staggered pass-on rates to consumers... but this still means power rate hikes for the consumers and this should not be happening in the first place if there is a well thought out energy supply plan.”