The Energy Regulatory Commission (ERC) announced it is reviewing the reliability index that determines allowable outages for energy facilities to enhance monitoring and establish appropriate penalties.
In a report by BusinessWorld, ERC Chairperson Monalisa C. Dimalanta said that the review is based on a petition from the Philippine Independent Power Producers Association, Inc. (PIPPA) to ensure the indices accurately reflect operational performance.
The reliability index, in effect since 2020, allows the ERC to set maximum days for planned and unplanned outages annually, varying by generating plant technology.
The ERC investigates non-compliance by power generators, issues notices to comply and imposes fines and penalties for failures.
As of April 30, the ERC said that five power generation companies went over their unplanned outage allowance, during a period when power grids issued red and yellow alerts.
Dimalanta indicated the ERC aims to complete the review by the end of the month.
At a recent forum, Dimalanta noted that many distribution utilities (DUs), mainly electric cooperatives, had nearly 100% exposure to the Wholesale Electricity Spot Market (WESM) during the heatwave and red alerts over the past two months.
She explained that these utilities lacked bilateral contracts with locked-in prices and assured supply, relying instead on the WESM for their energy needs.
Dimalanta said the ERC is monitoring around 30 DUs with 25% to 100% WESM exposure and is checking whether they have power supply agreements (PSAs) pending approval or requests for provisional authority.
She hopes the ERC will address these issues in the coming months.
WESM allows energy companies to purchase power when their long-term contracted supply is insufficient but at a premium price.
Additionally, Dimalanta said the ERC anticipates more consumers will choose their own suppliers as the threshold for the Retail Competition and Open Access (RCOA) scheme decreases.
As the threshold for RCOA lowers over the next 4-5 years, more consumers are expected to switch from being captive customers of their DUs to contestable customers who choose their own suppliers, Dimalanta stressed.
Under the Electric Power Industry Reform Act of 2001, end-users consuming at least 500 kilowatts monthly can choose their power suppliers under RCOA. This scheme allows end-users to participate in the Competitive Retail Electricity Market and select from a range of power suppliers offering cheaper electricity.
Captive customers are those served by DUs in their respective areas.
