The Philippines needs to establish a more “robust and healthy” competition among its Generation Companies (GenCos) to guarantee sufficient power supply even during peak season.
During a virtual press conference on Wednesday, Senator Sherwin Gatchalian contended that the insufficient power supply in the Luzon grid that led to rotational interruptions might have stemmed from the lack of strict regulations on GenCos.
“What’s missing right now to bring robust competition in the sector. In my opinion, the competition is still not as robust as we want (it).
Competition is still not healthy on the GenCos’ side. Because of that, we still need to impose light regulation to make sure that everyone’s up to standard,” Gatchalian told reporters.
“But later on, when competition is robust… then there (would be) competition, and there (would be) ample supply. Only then we can slightly remove that light regulation,” he added.
Gatchalian, who chairs the Senate Committee on Energy, said the Department of Energy (DoE) and the Energy Regulatory Commission (ERC) need to impose a tighter watch on GenCos to ensure they meet industry standards.
He also noted that the regulatory bodies should remove the provision among GenCos to undergo an initial public offering (IPO).
“There’s an IPO provision for GenCos to go IPO. I see that as another layer of paperwork because of robust competition in the GenCos… They should not be mandated to go (with an) initial public offering anymore because they’re private sector and there’s competition in that sector,” the senator explained.
In the same virtual event, Pampanga Representative Juan Miguel Arroyo warned that Congress might use its power to revoke the franchise of erring and/or non-compliant GenCos.
“Congress can always revisit any franchise given if there are violations. That is a strong possibility that’s why there should some form of compliance,” he said.
To recall, the National Grid Corporation of the Philippines (NGCP) raised yellow and red alerts in the Luzon grid for three straight days last week.
The grid operator said the available supply was not enough to match the operating requirement of the island, hence, distribution utilities like the Manila Electric Co. (Meralco) had to implement rotational power interruptions in its franchise area.
“We have ample power supply, 90 percent of which is from our bilateral contracts and the remaining 10 percent for flexibility is from the spot market,” Joe R. Zaldarriaga, Meralco Vice President and Corporate Communications Head, told reporters.
“This year, we will continue to keep the lights on… especially with the rollout of the government Covid-19 vaccination program. As of the latest count, we are monitoring 316 vaccine sites and 113 storage facilities,” he added.
Meralco said it has also contracted an interim power supply agreement with Masinloc Power Partners for an additional 220 to 260 megawatts of capacity.