P4P Challenges DOE's Gas Auction Timeline
The Power for People Coalition (P4P) has challenged the Department of Energy's decision to proceed with its planned mid-merit natural gas capacity auction while the Energy Regulatory Commission is still consulting stakeholders on the rules that will determine how gas prices are benchmarked and settled.
In a statement, P4P said Energy Secretary Sharon Garin signed the auction's terms of reference on August 24, the same day the ERC began public consultations on its proposed rules for determining the gas auction threshold price. The ERC also scheduled consultations for Visayas and Mindanao stakeholders on August 25.
P4P Convenor Gerry Arances questioned the timing of the DOE's move, asking, 'The ERC is still in the middle of conducting public consultations on rate setting, so why has the DOE already issued the terms of reference? Why the rush, and who stands to benefit from this policy?'
The group has also raised concerns over potential exposure to volatile gas prices as the auction expands procurement opportunities for gas-fired generation beyond the Meralco franchise area. P4P cited data showing that four gas plants with power supply contracts with Meralco recorded generation rates ranging from PHP 10.67 to PHP 13 per kWh in August.