Last of two parts
ENERGY Regulatory Commission (ERC) Resolution 23, Series of 2026, provides “Revised rules on the Reliability Performance Indices and Equivalent Unplanned Outage Days per year for generating units,” and we have been told, per the ERC press release on the matter, that this will mean “a more dependable electricity supply, fewer potential supply disruptions during periods of high demand, and a more resilient power system capable of supporting the country’s long-term economic growth.” As I said in the first part of this column on Tuesday, in order for the public to have confidence that this will really be the result, we have to ask the question, “How?” What exactly will be happening that will cause these improvements?
Complicated oversight
One aspect of these new rules that makes them confusing to understand is that they are not, strictly speaking, a set of regulations directed at generating companies, because generation is deregulated under the Electric Power Industry Reform Act of 2001, and is thus outside ERC’s purview. Rather, the basis for the ERC setting guidelines that apply to generating companies is its regulatory authority over the system operator, or SO, as it is referred to in the ERC paperwork, which is the National Grid Corp. of the Philippines (NGCP).
The SO needs to ensure that there is the exact amount of stable supply needed in the transmission system at all times, as well as having an appropriate amount of reserve supply that can be tapped in case of spikes in demand, or a generation source going offline for whatever reason. In order to do this successfully, the SO needs to know the status of the generation plants connected to the grid, and it needs to know that status with some lead time — a week, a month, a couple of months — in order to properly plan resources to meet its mandate.
Every power plant, no matter what type, will occasionally have an “outage.” This might be due to reasons that can be planned and compensated for in the SO’s grid management activities, such as regular maintenance, running at reduced power due to reduced demand or the aforementioned maintenance (what is called “de-rated” capacity), being in the process of being decommissioned, or due to an unforeseen emergency situation, such as a mechanical breakdown or the effects of a natural disaster. The latter, called “unplanned outages,” are beyond the control of the SO; everything else can be worked into operational needs to keep the grid stable.
If NGCP, the SO, appropriately works the “planned outages” into its operational plan, then everything is fine; if it doesn’t do that correctly, then it is subject to penalties as a regulated entity. However, “unplanned outages” are not necessarily its fault, although when those occur, the SO has to address them properly in order to remain in regulatory compliance. Thus, the new rules are essentially an actuarial calculation on the extent of “unplanned outages” the SO should expect, and be able to manage in order to keep the grid stable. Anything beyond that extent then is considered the fault of the generation companies involved, and not the fault of the SO. As these are not regulated, it is not actually the ERC that penalizes them for it, but rather the Department of Energy (DOE); the DOE has simply delegated to the ERC the task of making the fair determination of the limits and the penalties beyond those limits, as it is more technically capable of doing that.
Benchmarks
Resolution 23, Series of 2026, is a total of 31 pages in length; the first six pages are the “Whereas” clauses establishing the legal basis for the resolution and the final decision of the ERC, while the following 25 pages in “Appendix A” are the specific details and calculations of the allowable “equivalent unplanned outage days,” or EUOD, for 11 different types of generation plants that do not include variable renewable energy such as wind or solar. The allowable EUOD range from 12.03 days per year for run-of-river hydroelectric plants to 37.03 days for oil-fired thermal plants. These are basic guidelines; the ERC can determine the exact figure for individual power plants, if those companies provide ample evidence to justify a variance.
The revised rules also set forth strict reporting requirements for different types of outages, so that the SO can plan accordingly, and specifies the penalties that can be applied to generation firms if they exceed their allowable outage limits, or fail to report outages properly. These penalties are rather steep, and increase quickly with successive violations; a generation plant with multiple violations could see the fines imposed spiral into the tens of millions of pesos if its problems are left uncorrected for any length of time.
Questions
For most people, two questions would probably come to mind after reading all this. First, why are power plants allowed so many days of “unplanned outages?” Second, why aren’t renewable energy (RE) generation plants included in these rules?
As for the first question, as I explained above, the allowable EUOD figures are the result of an actuarial calculation, meaning they are reasonably likely projections based on a large amount of past performance data. As time goes on and more data is gathered — hopefully, data that indicates improving performance — the figures will be adjusted accordingly; the new rules provide for that.
As for the second question, in my opinion, RE should be subject to outage and reporting rules, just as any other type of generation source. However, the calculation that applies to variable RE is much more complex, because it has to take into account the “variable” part; after all, it is not the fault of the generator if the sun does not shine or the wind does not blow. Nevertheless, RE should not be given a completely free pass; I would assume there are people in the ERC working on the problem, and if not, they should be.
ben.kritz@manilatimes.net
Bluesky: @benkritz.bsky.social
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