ERC prepares contingency plans for possible brownouts in summer

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The Energy Regulatory Commission (ERC) is preparing contingency measures to ensure power supply and rate hikes would be mitigated during the summer months as the Department of Energy (DOE) has reportedly warned of a “very tight supply”.

The DOE earlier forecasted that yellow and red power alerts are possible this summer, and rolling brownouts are likely to occur should some power plants undergo forced outages.

“The DOE already told us… at first, we thought that extremely tight supply will just strike in May, but now they’re saying it could happen as early as April or even latter part of March,” ERC Chairperson Agnes Devanadera was quoted as saying in a Manila Bulletin report.

The ERC is eyeing to enforce contingency measures if such cases were to happen, which included the continuous implementation of the secondary price cap of ₱6.245 per kWh for traded capacity in the Wholesale Electricity Spot Market (WESM) as this could cushion the impact of price hikes in spot-procured capacities.

“The existing secondary price cap is still there and it has helped control the prices, but whether or not it’s time for us to change, it is something else,” Devanadera said.

Devanadera also said that the regulatory agency has ordered generation companies (GenCos) and distribution utilities (DUs) which were affected by last year’s Supreme Court decision on the competitive selection process to continue their off-take arrangements.

Devanadera explained that if the 153 PSAs affected by SC’s decision would stop supplying capacities to their respective DUs, this would result in 1,000 MW of capacity taken out of the system. 

“They (affected PSAs) are required to do the CSP, but they should continue supplying because if they will stop, that’s 1,000MW on top of the real shortage… so as a matter of policy, we told them don’t stop your supply while you’re doing your CSPs,” Devanadera noted.

However, she clarified that the supply deals should comply with the mandated CSP on their PSAs.

DUs are worried whether they will secure CSP exemption from the DOE due to the “state of emergency” the power system would undergo in the summer.

Devanadera said the matter is still being decided by the DOE and the ERC.

The ERC chief concluded that the agency has been “fast-tracking the approval of the COCs (certificates of compliance) so the plants can operate.”