The 620-megawatt Limay thermal power facility is still at the process of completing its registration as trading participant at the Wholesale Electricity Spot Market (WESM), after conceding to government plea for it to run as must-run unit (MRU) to avert feared rotating brownouts that could have stretched for weeks during the critical months of February.

“We are still completing our registration requirements. We were asked to run to help provide supply for the grid, so we had to operate Limay while we have yet to register it for trading at the WESM,” San Miguel Energy Corporation president Ramon S. Ang has admitted.

He noted that an operation & maintenance agreement (O&M) with Alstom Philippines Inc. is in place. Sources from the government though indicated that the plant is still being run on the strength of a temporary O&M pact that was sealed earlier and assigned to buyer SMEC.

The Limay plant was acquired by SMEC through a negotiated sale arrangement with the Power Sector Assets and Liabilities Management Corporation (PSALM) for a token price of $13.502 million.
As market operator Philippine Electricity Market Corporation (PEMC) hast yet to make filings for claims on must-run units (MRU), it was noted that the cost compensation of P12.90 per kilowatt hour (kWh) set for the Limay facility has been initially pegged on ancillary services rates.

The cost-recovery claims for MRUs will have to be based on the generation pricing index (GPI),” whereby an owner of the power generation plant used as an MRU “can be paid additional compensation if it applies to the Market Operator and successfully shows proof that the payment based on the GPI is insufficient to cover generation costs.”

Such compensation claims may cover: Cost of fuel; variable operating and maintenance costs; and start-up and shut-down costs.

The Energy Regulatory Commission (ERC) has pointed out that it is not the “cause of delay” as to rendering ruling on compensations set for power producers being dispatched as MRUs, noting that there was nothing it can act on since PEMC has not filed anything yet. The regulatory body noted that, it being a quasi-judicial body, will only act on applications or petitions filed, such as those of the WESM’s market operator.