Energy regulator grants compliance certificate to Panay, Negros power firms
THE ENERGY Regulatory Commission (ERC) said on Wednesday that it approved and issued a certificate of compliance (CoC) to two power generation companies in the Visayas, ensuring electricity supply in the area during the dry season.
The regulator also identified five power generation projects for which it issued provisional authorities (PAO) to operate. Its actions were all dated Feb. 13, 2018 or after a temporary restraining order had been issued by the Court of Appeals against the suspension of the four ERC commissioners.
In a statement, ERC Chairperson Agnes T. Devanadera said the regulator “recognizes the need for the immediate issuance” of the certificate and the provisional authority “in order to ensure a reliable and sustainable power supply especially that there is an upsurge in power demand during the summer months.”
She said it is imperative for a power generation company to secure a CoC or a PAO before it starts commercial operation.
A CoC is issued by the ERC in favor of a person or entity to operate a power plant or other facilities used in the generation of electricity as called for under Section 6 of Republic Act No. 9136 or the Electric Power Industry Reform Act of 2001 (EPIRA), and Section 4 of EPIRA’s implementing rules and regulations.
Ahead of the issuance of the CoC, the PAO may be issued to enable a generation company to operate its facility. The authority is issued through a notification to the company. It is valid for six months from issuance. The six-month period is included in the five-year term of the CoC that may be issued.
The ERC identified the two projects with newly issued CoCs as Panay Energy Development Corp. for its 150-megawatt (MW) unit three circulating fluidized bed coal-fired power plant in Barangay Ingore, La Paz, Iloilo City; and Silay Solar Power, Inc. for its 25-MW solar farm in Barangay Rizal, Silay City, Negros Occidental.
The five entities that have secured PAOs are Palm Concepcion Power Corp., Nickel Asia Corp., EDC Siklab Power Corp., Gaisano Balasan Solar Rooftop Project, and SMC Consolidated Power Corp.
Of the five, SMC Consolidated Power has the biggest capacity at 150-MW for unit two of its coal-fired power plant in Barangay Lanao, Limay, Bataan. Palm Concepcion has the second biggest at 135- MW for its plant in Sitio Puntales, Barangay Nipa, Concepcion, Iloilo; followed by Nickel Asia’s 10.944-MW diesel power plant in Quezon, Surigao City.
Separately, the ERC said the lower system loss cap to be charged by distribution utilities is to take effect starting in the May 2018 electric billing period. “The lowering of the system loss caps is a move to bring down the power rates and help electricity consumers mitigate the impact of rising costs of commodities and services. This will encourage distribution utilities (DUs) to improve their distribution system and facilities so that they adhere to the newly prescribed system loss cap,” Ms. Devanadera said.
Resolution No. 20, Series of 2017, “A Resolution Adopting the ERC Rules for Setting the Distribution System Loss Cap and Establishing Performance Incentive Scheme for Distribution Efficiency” embodies the new distribution system loss cap that can be recovered and charged by DUs to their customers.
Under the resolution, private DUs are allowed to charge only up to 6.5% of distribution system loss, or the difference between the electricity delivered to the power distribution system and what was delivered to consumers connected to the system.
The resolution calls for a gradual reduction in the system loss cap until it reaches 5.5% by 2021.
For electric cooperatives, the ERC clustered the utilities “based on similar technical considerations.” They will have a cap of 12% for 2018, subsequently charge a cap within a range of 12% to 8.25% until 2022 onwards based on their clusters.