LUZON, DELIKADO SUPPLY: Yellow alerts trigger WESM prices increase


For the third time this month, the Luzon grid was placed on yellow alert last Friday, triggering a supply tightening that could result in price hikes, particularly in the Wholesale Electricity Spot Market.

The yellow alert was issued due to lack of sufficient power supply in some plants.

From this week’s series of yellow alerts, the highest load weighted average price (LWAP) in the spot market reached P11.53 per kilowatt hour based on data gathered by WESM operator Independent Electricity Market Operator of the Philippines (IEMOP).

In that period, the average LWAP was at P9.054 per kWh, almost P3.00 per kWh higher than the daily average of P6.49 per kWh and way higher than last month’s average of P4.23 per kWh.

In a report by Manila Bulletin, system operator National Grid Corporation of the Philippines (NGCP) declared that there’s still a lack in power reserves as of March 8 (Friday). As a result, it issued another yellow alert at 11:00 am to 12:00 noon; and 2:00 to 3:00 pm.

Although the number of plants on forced outages had gone smaller, the 59 MW Bacon-Manito (BacMan) unit 2 power plant of Energy Development Corporation (EDC) of the Lopez group had joined the forced outages, NGCP reported.

Other generating facilities still included on unplanned shutdowns were: 316MW GNPower-unit 2 of the Ayala-Aboitiz joint venture; the 300MW Calaca unit 2 power plant of the Consunji group; the 150MW unit 1 of South Luzon Thermal Energy Corporation (SLTEC) of the Ayala group; the Masinloc generating units of San Miguel group; and the Pagbilao 3 power facility of the Aboitiz group and TeaM Energy Philippines.

The Department of Energy (DOE) said that the yellow alerts are not a problem, despite industry stakeholders fearing price hikes that consumers will have to shoulder. Others think this might be a bigger concern in the country’s power supply-demand situation.

Congress called for an investigation regarding the recent unplanned outages of power facilities, fearing a repeat of the 2013 power crisis when consumers were supposed to pay for a P5.00 per kWh hike in their electricity bills, which was stopped by the Supreme Court.

Bayan Muna Representative Carlos Isagani Zarate released a statement to the media, which was quoted in a Manila Bulletin report saying, “more than 10 plants have shutdown – counting those that were de-rated. These shutdowns are too numerous and they will definitely cause a spike in power rates if we do nothing about it.”

He also added that right now,” the DOE is saying that their policy is to have staggered pass-on rates to consumers… but this still means power rate hikes for the consumers and this should not be happening in the first place if there is a well thought out energy supply plan.”