The ERC, Nasecore, pumped hydro and nuclear power

Last Monday a “consumer group” went to the Ombudsman and filed a complaint against Energy Regulatory Commission (ERC) officials for allowing line rental charges embedded in electricity bills. The National Association of Electricity Consumers for Reforms (Nasecore) wants the Ombudsman to determine if there are legal basis for such charges, and if credits were returned to the consumers especially those in the Visayas grid where yellow-red alerts are experienced almost daily.

Line rental or BLLCC

Last Tuesday, the ERC explained in a press statement what the “line rental” or Bilateral Line Loss and Congestion Cost (BLLCC) is all about. Electricity produced in Batangas or Bataan power plants and transmitted to distribution utilities (DUs) like Meralco and electric cooperatives (ECs) suffer from technical loss in the transmission process over long distance, explainable by physics and not politics.

With the system loss in the transmission process, there is price differential between the point where the power is produced and the point where it is delivered. This price differential is called the BLLCC or simply “line rental” and it must be paid by the consumers, otherwise taxpayers will pay for it.

I saw one letter of Nasecore to ERC, it is a political harassment and legal blackmail letter. That ERC should provide the group with so many data, some of which may border on privacy like “monthly amount of BLLCC recovered from consumers per DU and EC from first implementation to the present or at minimum for the most recent five-year period.”

Then the blackmail, “a complete written response within seven working days from receipt… Should the Commission be unable to (provide)… legal and administrative remedies including referral to Office of the Ombudsman.”

Wait – a non-elected, non-appointed, self-styled and self-deluded “consumer group” that does not represent me or many other consumers would make such legal harassment to an EPIRA-created body?

Me, as a consumer, my interests are simple and two-fold: One, no blackout even for a minute. Ample electricity supply when I need it. And two, more choices including an ability to choose who should supply my electricity, what energy sources, what fixed price for a year, and so on.

Locational marginal pricing (LMP)

Line rental exists because the Philippines uses LMP where electricity prices can differ from one location or “node” to another. At normal conditions, low-cost generators can freely supply electricity to where it is needed so nodal prices are relatively similar.

But the Philippines being an archipelago, especially in the Visayas with many big islands (Samar, Leyte, Panay, Guimaras, Negros, Cebu, Bohol), nodal prices can be high. Unplanned shutdown or prolonged maintenance shutdown of major generating units can trigger high line rental, DUs and ECs must source replacement power across island interconnections by the NGCP. This can lead to supply congestion as generation sources from far away islands compete for limited interconnection capacity. So nodal prices can diverge high, consumers in electricity-deficit islands and provinces must pay higher to avoid the inconvenience and high business costs of blackout.

Each Visayas sub-grids (especially Negros, Bohol, Samar) should have more baseload facilities like new coal and gas plants on top of existing geothermal and old coal plants. Dependence on power interconnection between islands should be minimized, nodal price differential can be minimized, help consumers avoid high line rental charge.

Nasecore as a fake and self-deluded “consumer group” cannot articulate my basic interest of more power supply, cannot articulate more baseload plants per Visayas sub-grid because it is focused on the personal and political agenda of its leadership like perhaps gunning for a seat as party-list in Congress or whatever political position. I think it should rename Nasecore as “National Association of Self-styled Electricity Crew for Realpolitik.”

Heavy flooding and pumped hydro storage

The habagat-sustained monsoon rains is now on the fifth week in many provinces in Northern Luzon, lots of flood in so many places.

Hydroelectric plants, both baseload and pumped hydro storage (PHS), are very useful in reducing flash flooding because of their dams, weirs and related water storage facilities. The 720-MW Caliraya-Botocan-Kalayaan (CBK) hydro plant in Laguna is the largest PHS in the Philippines and serves two very important roles.

One, high absorption and storage of flood water.  Two, as a heavy-duty physical buffer and price stabilizer. Some high-cost thermal ancillary services (AS) like diesel plants can be replaced by lower-cost PSH and help reduce AS cost in the transmission charge in our monthly electricity bill.

Recently the ERC has suspended power delivery service (PDS) charges.  This suspension will allow facilities to draw electricity from the grid solely for storage during low-price periods without being double-charged for transmission wheeling. Soak up negative-priced solar gluts at noon and release water to produce electricity during high-demand evening peaks, CBK PHS can cap wild uptick of P14/kWh or more spot price spikes. Since it is located strategically next to Metro Manila’s massive load center, CBK can discharge its power locally, directly bypass grid bottlenecks and relieve evening transmission line congestion.

Nuclear power feasibility study

This week, Meralco and Meralco PowerGen Corp. (MGEN) have selected US-based engineering firm Sargent & Lundy, in partnership with local engineering firm AMH Philippines Inc. (AMH), to undertake a comprehensive feasibility study for the potential deployment of small modular reactors (SMRs) in the Philippines.

The US Trade and Development Agency (USTDA) has granted Meralco with a $2.8 million technical assistance fund announced last February. The study targeted for completion by fourth quarter of 2027 will provide One Meralco with a rigorous, data-driven basis for determining whether, when, and how SMRs could form part of the country’s future energy mix.

MGEN president and CEO Manny Rubio optimistically said that their company’s nuclear roadmap has become “actionable, data-driven under our NEST program. As we advance this USTDA-funded study, MGEN remains committed to exploring safe, reliable, and low- carbon technologies such as SMRs as we work to secure the Philippines’ long-term energy future and support the country’s economic growth.” Cool.