New limits on market share of installed power capacity set

The Energy Regulatory Commission (ERC) has set the new annual limit for installed generation capacity (IGC) per generation company (genco) on a national and per grid basis for this year to promote fair competition in the power sector.

In a resolution, the ERC said the country’s installed capacity increased to 24.65 million kilowatts (kW) from 23.42 million kW, necessitating adjustments in caps in the genco’s output in the national grid and per grid.

The ERC raised the limit on a nationwide basis to 6.16 million kW from 5.86 million kW, equivalent to 25 percent of the installed capacity of the national grid.

The Luzon grid saw an increase in capacity from 15.97 million kW to 17.08 million kW, which also raised the grid’s IGC cap from 4.79 million kW to 5.12 million kW.

The Mindanao grid also registered an increase in capacity to 4.2 million kW from 4.07 million kW, translating to an upward adjustment in IGC limit to 1.26 million kW from 1.22 million kW.

On the other hand, the Visayas grid saw a slight reduction in its capacity to 3.37 million kW from 3.38 million kW. Consequently, the grid’s IGC limit was decreased to 1.012 million kW from 1.014 million kW.

The installed generation capacity limits for Luzon, Visayas and Mindanao represent 30 percent of the total installed capacity in each grid, or the market share limitations.

The changes for the national and per grid basis will be implemented until the next adjustment on or before March 15, 2023.

The power regulator sets the annual adjustment on the capacity limits for generation companies in terms of output and market share until March 15 of every year.

The power regulator said the new limits were based on the maximum stable load (Pmax) of gencos, instead of their technical description as stated in their certificates of compliances (COCs).

Pmax is defined as the maximum demand in megawatts that a generating unit can reliably sustain for an indefinite period of time.

The adjustments were “pursuant to its mandate to promote free and fair competition in the generation and supply of electricity to achieve greater operational and economic efficiency and to ensure consumer protection and enhance the competitive operation of the markets for generation and supply of electricity,” the ERC said.

The ERC is mandated by Republic Act 9136 or the Electric Power Industry Reform Act of 2001 (EPIRA) to set the market share limitations per regional grids and the national grid to prohibit generation companies from owning more than 30 percent of the installed capacity of a grid and more than 25 percent of the installed capacity of the national grid.