ERC blames gencos’ “pricing play” for Red Alert

agnes devanadera

The Energy Regulatory Commission (ERC) has openly tagged power generation companies (gencos) as the culprits behind last week’s Red Alerts in Luzon with plants went on forced outages beyond the time allowed.

At the House Committee on Energy’s hearing on Friday, ERC Chairperson Agnes Devanadera hinted of a “pricing play,” as the secondary price cap in the Wholesale Electricity Spot Market (WESM) has been hit at least 418 times this year alone. The quasi-judicial regulator also suspects a “play” given that the price spikes due to the lack of power supply would be passed on to consumers.

Devanadera said the secondary price cap was recorded only thrice in 2019, the last time the Luzon Grid was on Red Alert. The agency particularly said that it is using 2019 figures as basis for comparison in its evaluation of power plants and their respective pricing.

WESM’s primary price cap of Php32 per kilowatt-hour was also breached during the Red Alerts, which lasted from May 31-June 2.

The ERC recently demanded explanations from 17 gencos, whose plants exceeded the time allowed for unplanned shutdowns prior to last week’s rotational brownouts.

Devanadera said some gencos already began submitting their responses, most common of which is the delayed or non-arrival of spare parts and personnel — including consultants — needed for plant generators’ maintenance work due to the COVID-19 pandemic. Nonetheless, the regulator is not taking these at face value, which is why it would pursue further investigation.

Malacanang has ordered the ERC, Department of Justice, and the Philippine Competition Commission to help the Department of Energy determine if there are sufficient grounds to file economic sabotage cases against the allegedly erring gencos.

Bayan Muna partylist Rep. Carlos Zarate called on the ERC to fast-track its probe on the energy sector’s “old boys club” to prevent a repeat of the Red Alerts.