Philippines power firms face ERC show-cause orders over outage limits

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ERC orders for PH power firms

Highlights

On Oct. 14, the Energy Regulatory Commission issued show-cause orders to major power firms—including subsidiaries of Aboitiz Power, First Gen, Meralco, and Vivant—over exceeding outage limits.
The ERC warned appropriate penalties will be imposed after reviewing company responses to reliability violations, highlighting due process and evidence as prerequisites for enforcement.
In July, the ERC adopted revised reliability standards capping unplanned outages from 12.72 to 37.03 days annually depending on plant type, applying 2026 indices for ongoing compliance reviews.

Regulatory review targets outage compliance

As reported by BusinessWorld Online, the Energy Regulatory Commission said the orders, issued on Oct. 14, require the companies to submit verified explanations on their reported noncompliance with reliability performance standards. The action follows the regulator’s review of power plant outages after concerns over recurring supply disruptions, particularly in the Visayas and Mindanao.

Earlier, on June 11, the commission sent notices of noncompliance with orders to comply and explain to 25 generation companies, covering outage events involving 48 generating units. After evaluating outage records, explanations and supporting documents, the ERC moved forward with show-cause orders for units found to have exceeded prescribed equivalent unplanned outage limits.

The companies named include subsidiaries and affiliates of Aboitiz Power Corp., First Gen Corp., Manila Electric Co. and Vivant Corp. Among them are Therma Mobile, Inc., Therma Visayas, Inc., Cleanenergy 9 Power, Inc., Energy Development Corp., Bac-Man Geothermal, Inc., Toledo Power Co., Inc., Excellent Energy Resources, Inc., Meridian Power, Inc., Belgrove Power Corp., Central Azucarera de San Antonio, Inc., Republic Cement & Building Materials, Inc., SPC Island Power Corp. and Sunwest Water & Electric Company 2, Inc.

Meralco PowerGen Corp., LNGPH and Meridian Power confirmed receiving the orders and said they would respond within the prescribed period. MGEN Thermal President and Chief Executive Officer Arnel L. Santos said the company is preparing its response and would explain the circumstances surrounding outages that it said were necessary for the safe and reliable operation of the units and for grid stability, while LNGPH said its Batangas gas-fired power plant resumed operations in March and is now fully operational.

Grid pressure and revised standards shape potential penalties

The ERC said it has yet to receive the verified responses required under the latest orders and will evaluate additional submissions and supporting documents before resolving the cases. It added that appropriate penalties will be imposed if violations of prescribed reliability performance standards are established, while stressing that enforcement proceedings must observe due process and be supported by evidence.

In July, the commission adopted revised rules on reliability performance indices and equivalent unplanned outage days per year for generating units to strengthen outage monitoring and improve maintenance planning. Under the revised standards, allowable annual limits include 32.15 days for pulverized coal units, 27.32 days for circulating fluidized bed units, 14.35 days for combined-cycle plants, 26.92 days for gas turbines, 21.09 days for diesel plants and 22.98 days for geothermal facilities.

Conventional hydroelectric plants are limited to 12.72 equivalent unplanned outage days annually, oil-fired thermal plants to 37.03 days and biomass facilities to 32.06 days. ERC Chairperson and Chief Executive Officer Francis Saturnino C. Juan said the commission used the 2020 reliability standards when it issued the initial notices of noncompliance and later applied the 2026 reliability indices in evaluating company responses.

The regulator said it continues to monitor the reliability performance of generating facilities and prevailing grid conditions to ensure compliance and address electricity supply concerns. The Visayas and Mindanao grids have repeatedly been placed under red and yellow alerts this year because of insufficient generation capacity and tight operating reserves, partly due to power plant outages.

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