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Bacolod City, Philippines Thursday, May 16, 2019
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70% cap on power plantsí
contracting capacity eyed


MANILA - Power producers in the Philippines will be required to have a 70-percent cap on their contracting capacities, likely by the third quarter of 2019, to ensure availability of buffer supply during times of need.

Department of Energy Undersecretary Felix William Fuentebella, in a briefing yesterday, said they are now in talks with all stakeholders for this policy.

“Soon… (We can release the circular) in three months,” he said.

The contracting capacity of a certain power plant is described as the portion of its expected total electricity output that can be sold in advance. By limiting the amount of power that can be pre-sold to only 70 percent, the DOE is assured that there will be 30 percent electricity remaining to tap for emergencies.

Fuentebella explained that this measure is aimed at ensuring that reserve electricity is available to fill a sudden power gap, such as when a power plant shuts down temporarily.

“There’ll be no generator that will be a replacement every time. We will distribute the replacement,” he said pointing out that the reserves can be sold through replacement power contracts or the spot market when reserves are low.

He added this policy will cover new contracts, as well as those up for renewal.

Currently, the Luzon grid is experiencing yellow and sometimes red alerts due to low power reserves.

Fuentebella said the DOE is working to prevent this kind of situation in the future “that’s why we’re coming up with better policies.”

“Our experiences should push us to come up with better policies and we’re pushing the 70 percent cap so that our power plants won’t be strained so much and we would be able to address breakdowns,” he added.

Earlier, the Joint Congressional Power Commission also approved the revised rules on the financial benefits to communities hosting the country’s power plants.

The JCPC, chaired by Senator Sherwin Gatchalian and Marinduque Rep. Lord Allan Jay Velasco, approved several amendments to the implementing rules and regulations of the Electric Power Industry Reform Act law, as contained in the twin circulars of the DOE.

The first department circular, DC 2018-03-005, prescribes the guidelines recognizing the rights of indigenous cultural communities/indigenous peoples in their ancestral domain and access to their financial benefits as host communities, under ER 1-94 Program and Rule 29 (A) of the IRR of the EPIRA law.

The second circular, DC 2018-08-0021, provides for the amendments to Rule 29 (A) of the IRR of the EPIRA law.

“Definitely we want to empower and to give the benefits as quickly as possible to the local government units," Gatchalian said, adding a total of P6 billion outstanding benefits have yet to be released to LGUs because of red tape and complications in the process.

The DOE said one of the major changes introduced is the direct remittance of financial benefits to host communities for their immediate utilization.

Streamlining the release of funding will eliminate the bureaucratic process, which hampers the socio-economic development of the communities hosting the power plants.*PNA


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