ERC resets genco limits on power output, market share

MANILA, Philippines - To keep a level playing field, the country’s power sector watchdog has reset the yearly cap on generation companies’ output and market share.

In a resolution, the Energy Regulatory Commission (ERC) adjusted the installed generating capacities (IGC) and market share limitations (MSL) for the year 2014.

Under Republic Act 9136 or the Electric Power Industry Reform Act of 2001 (EPIRA), the MSL is set annually to prevent a person, company, related group or independent power producer administrator (IPPA), singly or in combination, to own, operate, or control more than 30 percent of the IGC of a grid, and/or 25 percent of the national IGC.

The ERC sets a new limit on IGC and MSL as often as necessary based on the maximum capacity of the power plants submitted by the gencos and other entities.

The gencos, based on the 30 percent IGC limit as of March 2014, shall not go beyond 3,612,425.18 kilowatts (kw) for Luzon; 548,187.60 kw for the Visayas; 589,091.70 kw for Mindanao and 3,958,087.07 kw for the national grid.

The ERC explained that the adjustments in the IGC are based on the submission of the gencos and are accounted for by the increase in the IGCs of some power plants; decrease in the IGCs of certain power plants; inclusion of IGCs for new, re-commissioned, or additional power plant facilities of independent power producers (IPPs); and exclusion of IGCs for IPPs that have undergone plant shutdown/rehabilitation or have stopped operations due to natural calamities.

The ERC said the adjustments in the IGCs were caused by the exclusion of Power Barge 103 located in Estancia, Iloilo which is undergoing rehabilitation; the decrease in the IGC of AP Renewables Inc.’s (APRI) Tiwi and Makban GPPs due to fuel (steam) supply constraints and decline in the steam reservoir conditions; and the increase and decrease in the IGC of various IPPs due to high/low water elevation for hydroelectric plants, and power output during the conduct of capacity test to determine the maximum capacity of the generating facilities.

ERC executive director Francis Saturnino Juan said some gencos, such as San Miguel Corp., are nearly breaching the limit. As of January 2014, SMC Global Power Holdings Corp., San Miguel’s power generation subsidiary, has a generation capacity of more than 2,500 megawatts. As of 2012, SMC Global already cornered a 17 percent market share of the power supply of the national grid and 23 percent share of the Luzon grid.

“The ERC just wants to make sure that the gencos will be within the market limit set by the law and will not be able to influence price due to their huge share in the market,” he said.