THE Department of Energy (DOE) has declared the state-owned Malaya Thermal Power Plant in Rizal as a must-run unit in a move that is expected to encourage companies to put up more power plants.
Energy Secretary Carlos Jericho Petilla said the plant will only be allowed to generate power that is needed to ensure system reliability during a yellow alert—a status that means reserves are below the minimum level.
He added that Malaya would not be allowed to compete with private firms unless the power sector is on yellow alert.
“Because they are assured that Malaya will not compete with them, we encourage them to put up more plants,” he told reporters in a press briefing on Wednesday.
Senator Sergio “Serge” Osmeña 3rd called on energy officials to promptly use the plant to help bring down the price of electricity.
Based on Osmeña’s calculations, using the Malaya plant could have significantly brought down prices in the Wholesale Electricity Spot Market (WESM) by at least P20. This would lower the burden passed on to consumers.
Malaya is operated by the state-owned Power Sector Assets and Liabilities Management Corporation (PSALM). Officials there said they did not dispatch power from Malaya to avoid incurring additional losses.
These losses would have been passed on to consumers through the universal charge.
Petilla admitted that Malaya is a headache. Although they are perennially offering Malaya in WESM, it is not considered because the players know they won’t be dispatched.
Because of this, Petilla said he formalized an old practice to allow Malaya to operate only in a “stand-by” mode.