Republic of the Philippines
DEPARTMENT OF ENERGY
13 April 2020
ATTY. VICTORIO MARIO A. DIMAGIBA, AB, LLB, LLM
LABAN KONSYUMER INC. (LKI)
P.O. Box 1161, QCCPO,
NCR, Philippines 1100
Dear Atty. Dimagiba:
This refers to your 24 February 2020 letter proposing various actions on the part of the Department of Energy (DOE) to ensure that the consumers enjoy their right to information and right to electricity at a reasonable price.
Upon perusal of the letter, we would like to apprise you of our clarifications on the issues, as raised in your letter, to wit:
1. On the proposed public disclosure of the Grid Operating and Maintenance Program (GOMP), please be informed that the DOE promulgated Department Circular (DC) No. DC2020-02-0004 entitled, “Providing Guidelines on the Planned Outage Schedules of Power Plants and Transmission Facilities and the Public Posting of the GOMP”, on 06 February 2020 that became effective on 21 February 2020.
Pursuant to the said Circular, the National Grid Corporation of the Philippines is mandated to post the approved annual GOMP in its website immediately after the effectivity of the DC. The same shall be posted in the websites of the DOE, the Energy Regulatory Commission (ERC) and the Market Operator of the Wholesale Electricity Spot Market (WESM).
2. On the recalculation of the System Cumulative Price Threshold Level at Php6,919/MWh and System Secondary Price Cap of Php4,502/MWh, the ERC already posted the proposed amendments to Resolution No. 4, Series of 2017, entitled “Amendments to the Pre-emptive Mitigating Measure in the Wholesale Electricity Spot Market (WESM)”, for comments from the industry stakeholders. Hence, we recommend you to coordinate with and submit to the ERC the necessary action for the latter to consider in its evaluation of the matter.
We have noted your recommendations to address price spikes in the WESM. The DOE is continuously studying measures to encourage generation investments while protecting consumer interest through delivery of reliable and reasonably priced energy.
3. The proposal to tap standby generators of industrial, commercial and other consumers owning generation units has long been implemented in the country through the Interruptible Load Program (ILP). This is a mechanism that allows for the compensation of large energy customers for voluntary de-loading from the grid during peak hours or when the supply situation is foreseen to be at critical level on the following day or about few hours before the situation occurs.
To this end, in coordination with the ERC and various distribution utilities (DUs) in the country, we sought commitment of consumers owning generating units. To date, there are about 3,612 MW of Self-Generating capacities that can be tapped to participate in
Energy Center, Rizal Drive, Bonifacio Global City, Taguig City, Metro Manila, Philippines
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the ILP excluding those self-generating facilities (SGFs) owned by firms that are directly connected to the grid. There are about 748 MW SGFs capacity participating in the ILP in the country. For Luzon, 570 MW are participating in the ILP while in Visayas, with the Visayan Electric Company as the lone implementer, has solicited ILP participation of 63.70 MW. Seven (7) DUs in Mindanao have implemented the ILP involving 48 SGFs with combined capacity of 58.40 MW.
With the ILP already in place, all technical and economic requirements were also put in place including the cost recovery mechanism for ILP participants.
4. With regard to acts of price manipulation in the WESM, the DOE has not received any report from the PEMC for the year 2019 which categorically identifies any trading participant to be performing such acts. With this, we would like to know the sources of these allegations so that we can refer the same to the ERC for their appropriate action.
Without the proper proceedings before the ERC and the subsequent imposition of concomitant sanctions, it will be illegal for the DOE and prejudicial to the generation companies to publicize their names prior to the observance of due process. Be that as it may, we interpose no objections should the LKI initiate any action against the erring generation companies for acts of price manipulation.
We also wish to inform you that the DOE has been working with the Philippine Competition Commission and ERC in determining all and any possible anti-competitive behavior of trading participants, particularly during tight supply conditions. The DOE also continuously monitors the WESM for any possible violations of Trading Participants through the regular submission of reports of PEMC’s Enforcement and Compliance Officer (ECO). The ECO monitors and investigates any breaches of the WESM Rules/Manuals and is mandated to impose penalties against erring WESM traders.
You may visit the PEMC’s website, https://www.wesm.ph/, wherein the ECO publishes monthly report in compliance with the Clause 10.8.6 of the WESM Market Surveillance, Compliance, and Enforcement Market Manual.
For your perusal, please find attached DCs No. DC2020-02-0004 and DC2015-06-0003 and ERC Resolutions No. 4, Series of 2017, No. 8, Series of 2010 and No. 8, Series of 2013.
The DOE highly appreciates LKI’s proactive initiatives and support in ensuring the security, reliability and reasonable price of energy. The DOE would like to appease you and your organization that we will closely monitor the development and implementation of various programs and initiatives to address your concerns.
Very truly yours,
Electric Power Industry Management Bureau
Cc: Secretary Alfonso G. Cusi
Undersecretary Felix William B. Fuentebella Assistant Secretary Redentor E. Delola