The Energy Regulatory Commission (ERC) said that it is expediting the process for electric cooperatives’ (ECs) power supply agreements (PSAs) before the start of summer.
In an ambush interview with ERC chairperson Monalisa Dimalanta, she shared that regulators and the Department of Energy (DOE) are currently assessing the supply situation in the coming months to prepare necessary actions to address power demand and supply during the hot season.
“Because the DOE is the one [also] that approves the outage schedules, right? From our end, we coordinate with the DOE. The generators notify us if there is any expected maintenance,” she told reporters.
“We are rushing all the approvals for PSAs for particularly our ECs that are exposed to the wholesale electricity spot market (WESM),” Dimalanta added.
PSAs are deals that deliver power to the ECs or distribution utilities (DUs) with regulatory-approved pricing mechanisms.
“Even if the [spot market] prices spike, their consumers can be insulated from the increase because they are charged under the PSAs,” she noted.
Last month, the Independent Electricity Market Operator of the Philippines (IEMOP) anticipated a spike in the spot market prices, given that consumers will demand more power over the hot period. However, they also projected a slightly lower demand than last year during the El Niño phenomenon.
According to the DOE, the projected peak demand in Luzon was at 14,769 megawatts (MW), while Visayas could potentially reach 3,111 MW, and Mindanao at 2,789 MW.
Regulators prepare for GEA-4
While the ERC is rushing PSAs with electric coops, the regulators are gearing up for the fourth green energy auction (GEA-4). This auction covers integrated renewable energy and storage systems (IRESS), with the focus on solar power plants with battery energy storage systems (BESS).
This follows after conducting the third green energy auction (GEA 3) in February, which covers renewable energy (RE) technologies such as pumped-storage hydropower, impounding hydropower, and geothermal.
“The DOE has already transmitted the results of the third green energy auction (GEA 3). We are in the process of putting together the GEA-4 rates for public consultation so that we can set the gear price for GEA-4,” Dimalanta said.
“We’ve updated the cost assumptions, we’ve had a lot of focus group discussions (FGDs) conducted already with developers, and I think we are more aligned now in terms of assumptions and expectations, plus we have the battery.”
The ERC chief further acknowledged the need to expedite the process, stating that the issuance of the gear price for GEA-4 was given a tight 30-day timeline.
“[I think it is] 30 days from the effectivity of the notice of auction. I can’t recall the exact time but we were given 30 days on that one. It’s a very tight [schedule] because the law requires us to do public consultation, [and] that’s the one that really sets some delays in the process.”
Amending EPIRA
In other news, the ERC is also hopeful that amendments to the Electric Power Industry Reform Act (EPIRA) will push through, as the law was designed to ensure reliable and fair electricity prices.
“It’s a very slim chance that we will get it passed, but we’re still hopeful that we can get the support from both houses,” she told reporters.
“We are still confident of the support of many legislators for ERC. Everyone wants [the] reform. So I think we are leaning on that desire of our legislators to really push for reforms in the sector.”
The amendments are currently being pursued, as updating specific policies is essential for keeping up with the evolving needs of the power industry through a structural overhaul.