Cusi absolves GenCos of collusion raps
Secretary Alfonso G. Cusi had been first on the draw to absolve power generation companies (GenCos) of the collusion raps thrown against them on the stressful ‘yellow and red alert’ conditions in the Luzon grid from July 19 to August 5 this year.
“On the issue of collusion, there is no collusion. We are not accusing anybody of collusion,” he stressed when asked by media as to the Department of Energy’s assessment of the alleged contrived moves of industry players on power plant shutdowns that subsequently resulted in patchy spikes of prices at the Wholesale Electricity Spot Market.
Cusi said “we are just investigating to make sure there are no violations. We just want to make sure that consumers are protected.”
So far, the energy department has tapped contingents from multi-disciplinary fields in the engineering profession to help them carry out technical audits of the power plants – primarily those that experienced forced outages on those tight-to-deficient supply occurrences in the grid.
When asked further if he can categorically state at this point if ‘no collusion really happened between and among industry players’, Cusi backtracked a bit when he said that “everything is still possible,” albeit qualifying that “in fairness to the GenCos, it will be extremely difficult to just accuse them of engaging in collusive acts without any basis.”
The GenCos responded that they cannot just unconscionably shut down their power plants because such could only result in financial losses for them – either due to foregone sales or in procurement of higher cost replacement power.
The ‘conspiracy theory’ of industry players actually turned up following Cusi’s letter to the Energy Regulatory Commission (ERC) asking the body to probe probable anti-competitive behavior of market participants following observed spikes in WESM prices as power reserves deplete at each day of yellow and red alert episodes in Luzon power supply.
Philippine Competition Commission Chairman Arsenio M. Balisacan similarly told the Senate that they received correspondence from the Energy Secretary “urging us or requesting us to initiate an investigation regarding this allegation of collusion.”
ERC Chairman Jose Vicente B. Salazar opted to give a more cautious statement at a Senate hearing when he said that “although we got the justifications submitted by the GenCos on the forced outages that transpired during that particular period, we have no way of validating if it was done intentionally or if it was done unintentionally.”
He said that what they have been focusing on now is “to determine whether the acts, including the bidding process and the justifications made for the forced outages, if these were done with the intention of increasing the prices of electricity in the market.”
The major question thrown against industry players had been why the power plants had been allowed on simultaneous shutdowns again – similar to the tricky events of 2013. Both the DOE and system operator National Grid Corporation of the Philippines (NGCP) indicated that such had been due to postponement of maintenance shutdowns of some plants because of the elections in May.
The synchronous downtime of power plants had been compounded by ‘forced outages’ that ultimately triggered worst case scenarios of rotating brownouts in Luzon on July 30 and August 5.
The amalgamated impact of the power plant maintenance shutdowns and forced outages resulted in a capacity loss of as much as 2,800 megawatts for the Luzon grid on most critical days.
Even the import of capacity from the Visayas grid as well as the activation of the interruptible load program (ILP) participants had failed to stop power interruptions on at least two instances because of extreme supply deficiency.
The sporadic strike of yellow and red alert incidents just eased last week because of depressed demand brought about by the week-long strike of rains, primarily in Metro Manila. (MMV)