GenCos to face new round of Senate probe

Published June 14, 2021, 2:46 PM

by Myrna M. Velasco

The generation companies (GenCos) which primarily caused the brownout-incidents in Luzon grid this year will face another round of investigation at the Senate this week.

According to Senate Committee on Energy Chairman Sherwin T. Gatchalian, the focus of investigation on Thursday (June 17) will be on the operational lapses the GenCos may have committed that consequently trigged the power outages last May 31 and June 1.

Relative to that, the Senate will also look into the failure of the Energy Regulatory Commission (ERC) in terms of penalizing the delinquent GenCos – given that simultaneous shutdowns of power plants had been a recurring dilemma during the brownouts in 2016; then the worse cases of power outages in 2019.

In a statement last week, the ERC noted that it already identified the GenCos that had not been compliant with the allowable number of forced outages on their electric generating facilities.

The industry regulator thus revealed the creation of a task force to “conduct a study on the power plant outages and resulting high prices in the WESM (Wholesale Electricity Spot Market).”

The ERC emphasized that it will be undertaking technical inspection to verify the outages that had been reported by the power plant owners and operators; and it will also look into the measures taken to bring them back to operation.

As noted by ERC Chairperson Agnes T. Devanadera, “the power supply shortage during the summer months has been a perennial problem, and the regulator has been monitoring the situation from day one.”

She added “there are existing rules and mechanisms in place on how to mitigate the impact to consumers,” and one of such measures had been the imposition of secondary price cap in the WESM to cushion successive price spikes in spot-traded capacity once supply runs tight.

“The stakeholders must be responsible in managing their operations efficiently and sensitive enough of the implications of planned or unplanned outages,” the ERC chief stressed.

Beyond the plants’ forced outages, the ERC-created task force will also identify the contributing factors to the unutilized capacities in the market; as well as determine the supply-demand factors that caused diminishing supply margin.

Further, the ERC will assess the compliance of the plants to their reportorial requirements when their plant outages happened; and their trading patterns in the spot market shall likewise be examined closely.