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ERC reviewing norms for allowable levels of power plant outages

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THE Energy Regulatory Commission (ERC) said it is reviewing the number of unscheduled outages that power plants are permitted over a year, which will seek to benchmark against the outage rate allowed in other jurisdictions have adopted.

ERC Commissioner Catherine P. Maceda said the agency has reviewed existing power supply agreements (PSAs) and it has provisions on outage allowance under the contracts forged between generation companies and distribution utilities.

“But we feel na ’yung beyond the outage allowance na nakalagay sa mga kontrata ay ’yun ho siguro karapat-dapat lang na hindi i-charge sa consumer kun’di du’n sa genco na hindi nakapag-deliver,” she said.

(But we feel that those that exceeded the outage allowance under the contract should not be charged on consumers, but on the generating company that failed to deliver.)

At present, the obligation to provide replacement power depends on the provisions of the PSA between a distribution utility and a generation company, and on the kind of outage that occurred.

The duration of the outage allowance in a year is also agreed between the contracting parties, including those for planned and unplanned outages.




Based on the ERC review, the maximum outage allowance ranges from 45 to 60 days on an annual basis. The agreed PSAs also provide for the cost arrangements if the outage is within the agreed number or beyond.

“We’ve mapped out all these contracts,” Ms. Maceda said.

The result of the review will be used in the rules on competitive selection process, which the ERC is drafting. Annexed to that draft is a template on PSAs.

“[The template will have] the minimum provisions that we expect to find in a power supply agreement, including provisions for replacement power, including provisions for how much allowance should ideally be,” she said, adding that the rules will include provisions on penalties.

“It’s ERC actually that can impose such sanctions and penalties,” she said.

“Again this is a template. The parties concerned under a free market principle are free to negotiate the specific terms of their agreement. But definitely, hindi na po manghuhula kung ano ang outage allowance na dapat i-develop. (there will be no guesswork involved in estimating the outage allowance) There’s already a basis,” Ms. Maceda said. — Victor V. Saulon