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Speaker Belmonte warns power players vs summer shutdown

/ 04:55 PM March 04, 2015

MANILA, Philippines—Speaker Feliciano Belmonte Jr. warned power players against arbitrary shutdowns of its power plants during the summer season when a power shortage is expected due to thinning supply.

In a statement on Wednesday, Belmonte urged government to closely monitor the independent power producers’ delivery of available capacity.

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“The power industry must not make matters worse by arbitrarily shutting down power plants whose maintenance can be rescheduled after the March to July critical period … The power producers should behave responsibly at this time when all are sacrificing,” Belmonte said.

The Speaker also warned against the repeat of the power rate hike amounting to P4.15 per kilowatt-hour rate increase in generation charge, at the time the prices in the spot market increased due to multiple shutdowns among colluding power players in December 2013.

The hike, which had been stalled by the Supreme Court, was eventually voided by the Energy Regulatory Commission (ERC) because the spot prices could not be qualified as “reasonable, rational, and competitive.”

“Both (the Department of Energy) and ERC have a duty to carefully scrutinize these sudden claims of forced outages to ensure that these are really because of unexpected mechanical breakdowns. We should guard against any artificial shortage caused by the deliberate withholding of supply just to jack up prices,” Belmonte said.

Both Houses of Congress approved its versions of the resolution granting President Benigno Aquino III emergency powers to contract additional capacity to address the looming power shortage.

The resolution relied on the Interruptible Loading Program (ILP) of the energy department as the solution to the shortage. Other proposed solutions are the fast tracking of committed projects, and plants for interconnection and rehabilitation.

Under the ILP, large industrial and commercial consumers will use privately owned generators to free up electricity that may be used by other smaller, residential consumers during the shortage. Government will reimburse the expenses of the ILP participants.

The summer power shortage is attributed to the looming El Niño phenomenon, the maintenance shutdown of the Malampaya power plant, increased or continuing outages of power plants, and the delay in commissioning of committed power projects.

Belmonte said he hoped the Senate would revise its version of the resolution which seeks to pass on to residential consumers the cost of the ILP. Congress is set to conduct a bicameral conference to consolidate the two versions of the resolution.

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“The DOE and the Grid Management Committee should already actively implement measures to prevent forced outages given that brownouts are now occurring nationwide … I am thus appealing to all—particularly those who are in the power sector—not to add to the burden of the nation and cooperate at becoming the solution,” Belmonte said.

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TAGS: brownouts, Feliciano Belmonte Jr., Outages, power plants
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