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Sen. Bongbong says unplanned power plant shutdowns are suspicious

Press Releases
2 July 2015

Senator Ferdinand “Bongbong” R. Marcos, Jr. today urged energy officials to look closely into the suspicious unscheduled power plant outages that nearly caused widespread brownouts in Luzon in the past three days.

While no brownouts actually occurred, Sen. Bongbong said the sudden drop in the supply of electricity could hurt consumers with higher electric bills in the coming months.

Contrary to the assurances of the Department of Energy, power reserves dipped again on Wednesday, taking Luzon on the verge of rotational brownouts and forcing grid operators to raise the yellow alert for the third straight day.

The first yellow alert was raised Monday when 10 power plants unexpectedly shut down. As of Wednesday, only the 240MW Calaca Power plant in Batangas was able to go online out of the 10 power plants that went on unplanned outages.

“Energy officials should look closer into these suspicious unplanned outages of power generating plants,” Sen. Bongbong said.

He noted that the unplanned outages occurred when power distributor Manila Electric Company (Meralco) is set to slash around 18 centavos per kilowatt-hour from the bill of their consumers due to lower generation cost.

However, with tight energy supply, Meralco expects a spike in the price of electricity it would source from the Wholesale Electricity Spot Market (WESM).  Consequently, consumers may have to pay higher electricity bills.

Under normal power supply conditions, the price of electricity in the Wholesale Electricity Spot Market (WESM) ranges from P5-P10 per KWH.

Under tight supply, when the yellow alert is raised, WESM prices go up to around P20-35 per KWH.

“It is unfortunate that these unplanned power plant outages have to happen at a time when consumers are anticipating lower electric bills,” Sen. Bongbong said.

“It’s understandable that a few plants may experience unplanned shutdown simultaneously, but ten plants going down at the same time is something else. It may be mere coincidence but even the most naïve of us can’t help wonder if there is a hidden agenda behind these outages,” he added.

He recalled that in November 2013, suspicions of collusion among power producers were raised after several plants that were supposed to take up the supply slack as a result of the Malampaya shutdown went on unscheduled outages.

As a result of the power supply dip, distributors like Meralco were forced to buy more expensive electricity from WESM and charged record high rates from consumers.

Earlier, Sen. Bongbong bewailed the failure of the current administration to address power supply problems and urged the next President to give top priority to building more power plants to ensure adequate, reliable and cheaper electricity.

Aside from merely preventing the inconvenience brought about by brownouts, Marcos said building more power plants will also boost the country’s economic growth. He noted that foreign investors have been complaining of expensive and unreliable electricity in the Philippines.

Sen. Bongbong, Chairman of the Committee on Public Works, has been advocating for increased public spending for infrastructure, including power-related projects, to fuel the growth of the country’s economy and generate more jobs for the poor.