ERC readies guidelines on the determination of ownership and market share limitation of power gencos
The Energy Regulatory Commission (ERC) conducted a public consultation on its draft Guidelines on the limitations and determination of ownership, operation or control of installed generating capacity on October 13, 2005. The draft Guidelines was posted at the ERC website at www.erc.gov.ph for comments and suggestions prior to the said public presentation. The Guidelines provides limits in the determination of the installed generating capacity in a grid and the national generating installed capacity, including enforcement of the limits on concentration of ownership, operation or control. The ERC will issue a separate document initially setting the installed capacity and the market share limitations per grid and national grid.
Pursuant to Section 45 of Republic Act No. 9136 or the Electric Power Industry Reform Act (EPIRA) and its Implementing Rules and Regulations, no company, affiliate or IPP Administrator, singly or in combination, can own, operate or control more than thirty percent (30%) of the installed generating capacity in a grid and/or twenty-five percent (25%) of the national installed generating capacity. However, the National Power Corporation (NPC) and its Independent Power Producers (IPPs) are exempted from the said market limits during the time that its assets are being privatized and for those assets located in isolated grids that are not connected to the high voltage transmission system.
Under the proposed Guidelines, the ERC will adjust the installed capacity, per grid and national grid, not later than March 15 of every year based on the reported maximum load carrying capability of the power plants. However, the generating capacity of a generating unit will be deemed to be zero when it is temporarily shut down and cannot be reasonably energized and connected to the grid for a period longer than twelve (12) months. Further, the generating capacity of a generating unit will be deemed reduced to the extent of any permanent reduction in its maximum load carrying capability.
The Guidelines also provides that the entire capacity of a plant will be credited to the person or entity owning, operating, or controlling such generation facility. In the case of NPC and its IPPs, it is the control of the power plants and not ownership that determines crediting of the total capacity.
The said draft Guidelines will be posted anew in the ERC website together with the comments and suggestions taken during the October 13, 2005 public consultation in order to afford the stakeholders a final look at its provisions.
Presently, generation companies and other self generating entities are required, pursuant to their Certificates of Compliance (COCs) issued by the ERC, to immediately disclose any change in operation, rehabilitation, or shut down of their generation facilities in order for the ERC to determine their compliance with the said installed capacity and limitations.
October 26 , 2005