PSALM, DOE at odds over Malaya power plant dispatch

MANILA, Philippines - The Power Sector Assets and Liabilities Management Corp. (PSALM), the government agency tasked to privatize state-owned power assets, and the Department of Energy (DOE) have taken opposing views on the legality of PSALM’s stand not to dispatch the 650-megawatt Malaya Thermal Power Plant in Rizal.

PSALM, the owner of the 44-year-old plant, defended its move not to dispatch power during the one-month maintenance shutdown of the Malampaya gas platform late last year.

This after Energy Secretary Carlos Jericho Petilla said during the continuation of oral arguments on the disputed power rate hike that PSALM committed anti-competitive behavior when it did not dispatch power from the Malaya Thermal Power Plant despite a bid offer it made with the Wholesale Electricity Spot Market (WESM), the country’s trading floor for electricity.

 â€œThe technical limitations of Malaya, including slow start-up time and low fuel replenishment rate, make it a sheer impossibility for Malaya to be always traded through the WESM bidding process,” PSALM president Emmanuel Ledesma Jr. said.

Malaya bid at the WESM during the maintenance shutdown but did not actually transmit power, a move that allegedly caused prices at the trading floor to spike to as high as P62 per kilowatt-hour.

However, Ledesma said this was because of Malaya’s technical limitations. It was also a strategic move in case Malaya is actually called for in the event that of power outages or grid voltage support.

During the oral arguments, Petilla said Malaya’s open breaker status was illegal. An open breaker status means the power plant bid at the WESM but was not synchronized to the grid, which means that when asked to do so, it could not dispatch power.

However, Ledesma said the illegality of PSALM’s “open breaker status” since August 2012 has not yet been established.

He explained that as early as June 2013, PSALM had already explained to market operator Philippine Electricity Market Corp. its technical and financial reasons for not trading Malaya in the WESM after PEMC called the government corporation’s attention on the matter, its first time to do so.

Nonetheless, PSALM emphasized that it was the Energy Regulatory Commission  and not PEMC that had original and exclusive jurisdiction over all cases involving disputes between and among participates in the energy sector.