Gencos with prolonged plant outages may face economic sabotage raps


Anti-competitive and even “economic sabotage” charges possibly await generating companies (gencos) whose power plants have had prolonged outages, especially during the peak demand period, according to the Department of Energy (DOE).

During the DOE’s virtual press conference on Thursday, Energy Usec. Felix William Fuentebella said that the department has sought the assistance of the Philippine Competition Commission (PCC), the Energy Regulatory Commission (ERC), and the Department of Justice (DOJ) regarding the matter.

The DOE particularly asked the three agencies for help should there be any enforcement assistance and case build-up if a genco continues violating Department Circular No. 2020-02-0004

Under the policy, power plants — except hydroelectric ones — are barred from scheduling any outage for preventive maintenance during the second quarter of each year, when power demand reaches its peak due to the summer season. It also provides for a three-year calendar for the scheduling of planned outages.

“We have policies, then they submit schedules [for power plant maintenance] that are going beyond the period that they committed, which should not have been the case,” Fuentebella stressed.

In relation to this, Fuentebella said that KEPCO Ilijan Corporation, which operates the Ilijan gas plant in Batangas City, and Team Energy, which owns the Sual coal plant in Pangasinan, were told to move their scheduled outages. Ilijan’s 600-megawatt (MW) Block A and Sual’s 647MW Unit 1 were supposed to go on preventive maintenance shutdowns this summer, but the DOE told their gencos to move them sometime later this year.

Sual’s 647MW Unit 2 and Semirara Mining and Power Corporation’s Sem-Calaca 300MW Unit 2 have been on extended outage since last year, while Aboitiz Power Corporation’s GNPower Mariveles 316MW Unit 1 suddenly shut down last February and is expected to return to service in August.

Prior to this, the DOE called the attention of gencos of seven power plants that went offline in March.

Fuentebella said that he and Energy Sec. Alfonso Cusi have been beset with the problem of red and yellow alerts in Luzon every summer since they joined the department. The undersecretary pointed out that the circular aims to end the seemingly perennial problem.

The DOE had hinted of possible yellow alerts, or thin power supply reserves, in Luzon until June due to the simultaneous and prolonged outages.

“We cannot afford to go through these recurring problems. It provides a threat to our political stability, economic stability, and even national security. And we are going to face the elections next year,” the undersecretary said.

“If you think the [DOE] is weak, wait until we partner with PCC, ERC, and the DOJ,” he added.