Breach of law not allowed – ERC
Credit to Author: JORDEENE B. LAGARE| Date: Mon, 23 Sep 2019 16:31:06 +0000
ENTITIES seeking to operate their power plants must have completed all requirements before securing the permit to operate their respective facilities, the Energy Regulatory Commission (ERC) said.
In a statement on Monday, the regulator clarified that generation companies (gencos) must have complied with all the necessary documents and submitted the required permits before it can issue a certificate of compliance (CoC).
The agency issued the statement following Manila Electric Co.’s (Meralco) appeal to give the clearance to operate the 455-megawatt (MW) power plant in Mauban, Quezon to ensure sufficient power supply during the Malampaya gas field’s maintenance shutdown next month.
“We welcome the entry of new power plants as these will augment and ensure the sustainability of power supply. However, we will not allow the stakeholders to breach the law and the rules that we have promulgated as they were designed to ensure that the consuming public’s interest is not compromised,” ERC Chairperson and Chief Executive Officer (CEO) Agnes Devanadera explained.
Under Republic Act 9136, or the “Electric Power Industry Reform Act of 2001 (EPIRA),” gencos need to obtain a CoC from the ERC before starting commercial operations of their power plants, provided they got health, safety and environmental clearances from the appropriate government agencies.
“The EPIRA has specified the necessary clearances that generation companies must secure prior to the ERC’s issuance of CoCs. Unless all the documentary requirements have been fully complied with, only then we can issue the corresponding CoC,” Devanadera said.
Under the Revised Rules for the Issuance of Certificates of Compliance, they have up to 60 calendar days to decide on CoC applications from the date of complete submission of requirements, including the completion of ERC’s technical inspection of the power plant.
Last week, Energy Secretary Alfonso Cusi asked the ERC to act on Meralco’s application to run the P56.2-billion supercritical coal-fired power plant of San Buenaventura Power Ltd. Co. (SBPL), a joint venture of Meralco PowerGen Corp., the power generation arm of Meralco, and New Growth B.V., a wholly-owned subsidiary of Electricity Generating Public Co. Ltd. (EGCO) of Thailand.
“I wrote [a letter to the] ERC and I manifested to ERC the importance of it being online because that supply is necessary to augment the present supply of the country,” Cusi said.
Meralco President and CEO Ray Espinosa previously said the ERC is yet to issue the said certification for the coal facility, which could have bolstered power supply if it commenced commercial operations last September 15.
According to Espinosa, the agency raised issues over SBPL’s water rights, but the water rights have been issued in favor of Meralco by the National Water Regulatory Board.
Meanwhile, the ERC said it cannot determine whether or not the proposed rate in Meralco’s recent supply deals was indeed the least cost to the consumers.
But the regulator will ensure that the distribution utilities (DUs) that signed power supply agreements (PSAs) with a genco have opted for the lowest cost offer during the competitive selection process.
“At the moment, we cannot as yet determine or confirm whether the proposed rate in the Meralco PSA adverted to what was indeed the least cost. But once the subject Meralco PSA application has been filed, the ERC will conduct a thorough evaluation to ensure that the proposed rate in the PSA is the least cost,” Devanadera said.
The ERC chief said they would require DUs to provide pertinent documents which will prove that the competitive bidding they have undertaken adhered to the “least cost” principle.
The competitive selection process (CSP) primarily aims to ensure a fair, reasonable, and cost effective generation charge for consumers, under a transparent bidding between gencos and DUs. In May, the Supreme Court mandated them to subject their PSAs to the CSP.