DOE sets penalty versus power facilities’ outages

By Myrna M. Velasco – October 24, 2017, 10:00 PM

from Manila Bulletin

Forced outages in power plants and tripping of transmission lines will soon be enforced with penalties based on the ‘causers pay principle’ being thought out by the Department of Energy.

This is one of the directions the department has been advancing on its ‘policy tools rewiring’, according to Energy Secretary Alfonso G. Cusi “to discipline’ players in the restructured power industry and enhance reliability in the country’s electricity system.

“The DOE has a number of initiatives to ensure protection of the consumers. One is the implementation of the causers pay policy, which is a rewards-and-penalty system, where power industry players may be held accountable for forced outages,” the energy chief said.

Under “causers pay principle”, a corresponding penalty shall be imposed upon players that shall be causing distress in the power system triggering service interruptions to consumers.

In other countries, this industry fiat is alternatively enforced with the “beneficiary pays principle” which means that the beneficiaries bear the costs; or the “user pays principle”, wherein end-users will essentially shoulder all the costs incurred in the provision of service to them.

Cusi said the department would likely implement this penalty system through a Circular and be incorporated in the rules of the spot market after concluding the study and eventual public consultation on this policy proposition.

As expounded by Energy Undersecretary Felix William B. Fuentebella, the energy department takes heed of the experiences of the Australian and Singapore markets on this policy sphere.

An oft-repeated scenario in the Philippine power sector primarily in instances of rolling brownouts, has been ‘finger pointing’ as to which entity is at fault – and in the end, no one gets punished among the industry players. Ultimately, it would only be the consumers suffering not just from poor service, power interruptions but also high electric bills.