MANILA, Philippines (UPDATED) – The Senate is set to conduct an investigation into the simultaneous power interruptions in the island of Luzon.
Senator Sherwin Gatchalian, chairman of the committee on energy, said on Thursday, August 4, that they would look into the possible price rigging by electricity industry players, which led to the shutdown of 6 power plants on the Luzon.
“What we want is to determine what really happened and come out with legislation to prevent this type of collusion [from] happening,” Gatchalian said.
“We have to [know] if we have mechanisms to prevent collusion and to punish collusion, and that’s where the legislature will come in,” he added.
As a result, Gatchalian said electricity prices in the Wholesale Electricity Spot Market (WESM) increased from an average of P4 per kilowatt hour over the last month to P20 per kilowatt hour from July 29 to 30.
Senate Minority Leader Ralph Recto earlier filed a resolution seeking an investigation into the matter.
The disruptions, Recto said, could affect the Philippines’ continuously growing economy.
“Power interruptions in Luzon could disrupt the economic growth momentum of the Philippines and could discourage potential foreign investors,” he said.
Citing government estimates in 2014, Recto said the economic cost of power outages in the country is at least P9.3 billion and could possibly reach P23.3 billion. The amounts exclude foregone revenues in sectors that will be affected by disruptions.
The senator said the resolution aims to determine the cause of the “simultaneous shutdown of 6 power plants” and find ways on how to ensure a steady supply of electricity for Luzon.
The inquiry, Recto said, has “the end in view of determining measures that would further ensure a reliable and secure supply of electric power.”
Recto also expressed concern that the power shortages are happening in the grid of Luzon, where the country’s biggest power plants are located – the 1,218MW Sual and 630MW Masinloc power plants.
Gatchalian, in turn, urged the Duterte administration to “immediately” address the country’s unstable power supply by tapping new energy sources such as the Reed Bank.
He vowed to push for the immediate deployment of viable strategies to bring electricity prices down.
“We need to redouble our efforts to explore and exploit new indigenous energy resources, such as the abundant natural gas reserve in Reed Bank. Continued economic growth will depend on ensuring that our domestic industries have access to cheap and reliable electricity,” Gatchalian said.
Recto, in his resolution, cited the warnings issued by the National Grid Corporation of the Philippines (NGCP), which maintains and operates the power transmission network of the country.
In the week of July 25 to 31, the NGCP raised red alert twice while the yellow alert status was raised every day from July 26 to 31 on the Luzon grid.
On July 30, the NGCP raised a second red alert for the week for the Luzon grid and advised that power blackouts would be experienced in Luzon until 3 pm of that day.
In its power advisory then, the NGCP explained that the warning was due to “zero operating reserves” brought about by “insufficient power supply.”
The red alert came after 6 power plants in Luzon were shut down, namely:
- Sual 2 (647MW capacity)
- Calaca 2 (300MW capacity)
- Sta Rita mod. 20 (262MW capacity)
- SLTEC (270MW capacity)
- Limay 2 (60MW capacity)
- Angat Main 2 (50MW capacity)
On August 1, yellow alert was again raised for the Luzon grid from 11 am to 4 pm following the shutdown of several power plants.
“Red alert” means the contingency reserve is zero while “yellow alert” means power reserves are below the minimum level set by the regulator, which is equivalent to the capacity of the largest running power plant in the grid. – Rappler.com