DoE assures sufficient power supply despite Malaympaya shutdown

By Maria Romero – September 18, 2021 05:01 PM
from Daily Tribune

Power supply remains sufficient despite the 20-day preventive maintenance shutdown of the Malampaya natural gas field in October but the Department of Energy (DoE) has appealed for full compliance of industry stakeholders to avert any possible power price hike.

In a television interview on Thursday, Energy Undersecretary Felix William Fuentebella said electric cooperatives (ECs), generation companies (gencos), distribution utilities (DUs), and power plant operators are on the tight watch for any uncompetitive behavior that would result in pass-on charges to consumers.

Although the DoE does not have the power to penalize erring stakeholders, Fuentebella noted that the agency has tapped the Energy Regulatory Commission (ERC), Philippine Competition Commission (PCC), and Department of Justice (DOJ) to strictly monitor the market.

“We see that there are refusals to comply with the DoE orders that’s why we enjoined these bodies to also monitor (the market) for any uncompetitive act,” Fuentebella said.

Since the Malampaya plant fuels 30 percent of the electricity requirements of Luzon, failure to secure sufficient power reserves during its maintenance shutdown would lead to prolonged rotating blackouts and increased generation charges.

Under the Philippine Downstream Natural Gas Regulation, the DoE allowed the import of natural gas in anticipation of the Malampaya shutdown.

In 2018, the agency also implemented a Competitive Selection Process (CSP) that provides DUs the ability to safeguard consumers from the volatility of the prices in the spot market. It also requires them to sign a contract with suppliers for fixed rates for transparency.

Meanwhile, in 2019, the DoE directed the National Grid Corporation of the Philippines (NGCP) to secure ancillary service contracts or reserves, which are used to balance the grid in case a plant shutdown happens.