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Shaky Luzon power supply could drive up food prices, stall economic recovery, solon warns

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The Luzon grid’s unstable power supply until August, if left unchecked, could stoke inflation and set back the country’s economic recovery from the COVID-19 pandemic, Makati City Rep. Luis Campos Jr. warned on Sunday.

“We are gravely worried that the prospect of red and yellow alerts over the Luzon grid in the weeks ahead might drive up the cost of electricity and put more upward pressure on food prices,” Campos said.

Wholesale Electricity Spot Market (WESM) prices soared to an average of P9.29 per kilowatt hour (kwh) when the Luzon grid was put on red alert from May 31 to June 2 and had two consecutive days of rotating brownouts in some areas, Campos pointed out.

“The cost of P9.29 per kwh was 171 percent higher than the average WESM price of P3.42 per kwh from January to April,” Campos said.

The lawmaker expressed concern that higher electricity rates – coupled with potential supply disruptions – could adversely affect several power-intensive industries, including food manufacturing and canning as well as cooking oil processing.

“The Department of Energy (DOE) should spare no effort in averting further red and yellow alerts over the grid,” Campos said.

A yellow alert means that the grid has low power supply available, while a red alert indicates inadequate supply.

Last week, the DOE called for the deferment of scheduled maintenance work on large coal power plants to avoid more outages.

“We’re surprised that the DOE is taking action only now to fix the problem,” Campos said.

Campos noted that as early as mid-April, the National Grid Corp. of the Philippines (NGCP) had warned that Luzon could face power supply shortages until August due to baseload power plants simultaneously undergoing prolonged maintenance shutdown.

The power plants had previously suffered maintenance delays due to the pandemic, which restricted the movement of personnel and held up the delivery of spare parts.

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