Power firms fined over maximum outage breach

MANILA, Philippines — The Energy Regulatory Commission (ERC) has ordered the Energy Development Corp. (EDC), Power Sector Assets and Liabilities Management Corp. (PSALM) and SPC Island Power Corp. to pay fines for breaching maximum allowable outage days this year.

In separate orders issued on Sept. 8 but posted on its website on Oct. 19, the ERC found EDC, PSALM and SPC liable for having incurred unplanned outages more than the days allowed by the power regulator.

The commission directed the EDC to pay the administrative penalty of P1.022 million for incurring 22.64 days of unplanned outages of the Nasulo Geothermal Power Plant (NGPP) Unit 1, which is beyond the 13.7 days allowed for geothermal power plants.

NGPP Unit 1 went on forced shutdown from Jan. 3 to April 25 as it auto-tripped due to the activation of the main transformer surge relay. The NGPP Unit 1 has a rated capacity of 49.37 megawatts (MW).

On the other hand, PSALM was fined P980,400 for the excess unplanned outage of Unit 2 of Malaya Thermal Power Plant (MTPP) for 21.20 days.

The 350-MW MTPP Unit 2 was out for a total of 49 days but the annual maximum allowable unplanned outage was only 27.8 days for oil-fired thermal plants.

MTPP Unit 2 has been shut down since March 3 because of “encountering trouble with the generator automatic voltage regulator (AVR), having no excitation output voltage while attempting several times to synchronize the unit to the grid to conduct emission test/heat run test.”

The ERC said PSALM argued that the AVR assessment and repair “may no longer be necessary because of the successfully negotiated sale and privatization of the MTPP.”

The decision to no longer repair the plant is negligence on PSALM’s part given that it is a government agency and that the MTPP is a must-run unit during supply shortfall in the grid.

Lastly, the ERC ordered the SPC to settle P4.02 million in administrative penalty for having incurred 98 days of unplanned outage of the Panay Diesel Power Plant 3 (PDPP), which is in excess of the 14 days allowed for diesel power plants.

The power plant, with a rated capacity of 12.93 MW, has been on unplanned outage since July 23, 2016, incurring 113 days on shutdown until April 25 this year.

The SPC said the unplanned outage continued up to this year due to the alleged steep cost of replacing the crankshaft of the power plant and difficulty of finding a replacement of the part, forcing it to place the unit under preservation.

The ERC has yet to issue its decision on five more generation companies (gencos) that breached the outage level for the year.

Last month, the ERC said it was eyeing to issue orders and impose penalties on eight out of 17 gencos for exceeding allowable unplanned outage days this year.

In a Senate hearing in June, investigations for the 17 gencos were reportedly close to conclusion by July as declared by the ERC.

In a congressional hearing last month, ERC chair Agnes Devanadera said the power regulator eyes to complete the investigation within September.

However, Devanadera said timelines have been affected by quarantine restrictions, but the commission has committed to penalize erring gencos.

As of April, 35 power plants of 17 gencos have already breached the maximum allowable unplanned outage days for the year. These include Sem Calaca Power Corp., GN Power Mariveles Center Ltd. Co., Masinloc Power Partners Co. Ltd., Southwest Luzon Power Generation Corp., Team Sual Corp., SPC Power Corp., Panay Power Corp., SN Aboitiz Power-Benguet Inc., CBK Power Co. Ltd., SPC Island Power Corp., First Natgas Power Corp., FGP Corp., First Gas Power Corp., Power Sector Assets and Liabilities Management Corp., Energy Development Corp., Hedcor Bukidnon Inc. and PSALM-Soosan ENS Co. Ltd.

The Luzon grid lost as much as 4,000 megawatts in supply, leading to a deficiency of 716 MW at one point, as some power plants extended their plant outage while some went on forced outage.

This triggered in several instances the secondary price cap in the wholesale electricity spot market (WESM), allowing the market operator to cap the prices in the market at P6.245 per kilowatt-hour as a protection for consumers from possible price spikes.

Due to the severe power conditions in the power grid in the past two months, consumer electricity bills have increased mainly due to higher WESM charges.