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By Francis Allan L. Angelo

 

THE Regional Development Council (RDC) in Western Visayas will take its chances in requesting the transfer of the 32-megawatt Power Barge 104 from Davao to Panay.

 

The RDC passed last week in Bacolod City a resolution urging President Gloria Arroyo to order the transfer of PB 104 to Panay to ease the acute power shortage in the island.

 

Presidential Assistant for Western Visayas Raul Banias confirmed the passage of the RDC resolution which will be endorsed to the Department of Energy.

 

But Banias had earlier said Davao will oppose the transfer of PB 104 to other areas “because they need it for their reserves.”

 

Data from the National Grid Corporation of the Philippines showed that Panay has a peak demand of 210MW but its supply is only 128MW or a shortage of 82MW.

 

The island draws power from the Cebu-Negros-Panay grid, Panay Power Corp. (PPC), 15MW modular generator sets in Capiz and two power barges stationed in the city and province of Iloilo.

 

Power supply in Panay was imperiled by the turnover of the Panay Diesel Power Plant (PDPP) in Iloilo to its new owner SPC Island Power Corp.

 

Power utilities raised fears of losing some 50MW if SPC does not operate the power plant because of needed rehabilitation works and lack of supply agreement contracts with electric cooperatives.

 

The problem was remedied when the Department of Energy agreed to subsidize the operation of PDPP for five months until SPC has signed supply contracts with Panay utilities.

 

Singapore-based SPC bought PDPP and the Bohol Diesel Power Plant for US$5.7 million last year. The plants were turned over to the company March 25.

 

Officials of distribution utilities and electric cooperatives said new power plants are needed to stabilize the energy situation of the island.

 

Engr. Randy Pastolero, special assistant to Panay Electric Co. (Peco) president and CEO Miguel Cacho, said the 164MW coal-fired power plant proposed by Global Business Power Corp. (GBPC) in LaPaz district will help stabilize power supply in Iloilo City and the rest of the province.

 

Peco is the sole power distributor in Iloilo City which has a peak demand of 75MW daily.

 

GBPC operates PPC which supplies 61MW to Iloilo City. The rest of the city’s energy requirement comes from the National Power Corp.

By Francis Allan L. Angelo

 

PANAY Diesel Power Plant (PDPP) will continue to provide electricity at the same subsidized rate after it is turned over to Singaporean firm SPC Power Corp.

 

This was the outcome of the meeting between national officials and Ilonggo leaders in Malacañang Wednesday afternoon relative to concerns raised by electric cooperatives once PDPP is handed over to SPC March 26.

 

The meeting, which started 3pm to 5:45pm, was attended by Executive Secretary Eduardo Ermita, Department of Energy (DoE) Angelo Reyes, Iloilo 3rd district Rep. Arthur Defensor Sr., Iloilo City Mayor Jerry Treñas and presidential assistant for Western Visayas Raul Banias.

 

Also present were officials of the National Power Corp. (Napocor), Power Sector Assets and Liabilities Management Corp. (Psalm), Energy Regulatory Commission and SPC.

 

Defensor said it was agreed that PDPP will continue to provide electricity to the three Iloilo electric cooperatives at the same subsidized rate offered by Napocor.

 

Psalm, which supervises the sale of state-owned power assets, sold PDPP and Bohol Diesel Power Plant to SPC for more than US$5 million.

 

“The plant will be turned over to SPC as scheduled but it will continue to produce and sell electricity at the same subsidized rate (P2.80 per kilowatt-hour). It was also agreed that Psalm and Napocor will shoulder the operation cost of the plant even if it’s handed over to SPC,” Defensor said.

 

The Malacañang meeting was spurred by two concerns raised by electric cooperatives once PDPP is taken over by SPC:

 

– the cooperatives will lose 54 megawatts of electricity should SPC decide to rehabilitate the plant and uncertainties over the cost of power, resulting in longer rotating brownouts in Panay;

 

– consumers will be burdened by expensive power because SPC will now reflect the true cost of power once it runs the plant.

 

Defensor said the arrangement will take effect until the DoE has put in place the Visayas Supply Augmentation Auction (VSAA) program.

 

The VSAA will tap embedded power capacities in the region to make up for the power shortage in the area.

 

Data from the National Grid Corporation of the Philippines (formerly National Transmission Corp.) show that as of March 11, 2009, Panay is suffering from 68MW deficiency while Negros lacks 49.2MW.

 

Cebu, which hosts numerous power plants and located close to the geothermal plants in Samar-Leyte area, lacks 213MW. Bohol province has 34MW deficiency.

 

The power woes of Panay is expected to ease up once major power projects, such as the proposed coal-fired power plant of Global Business Power Corp. (GBPC) in LaPaz, Iloilo City, gets online late next year or early 2011.

 

GBPC, which belongs to the Metrobank group, operates Panay Power Corp., the sole power producer in Iloilo City.

 

Defensor said SPC is also planning to rehabilitate PDPP “because it is very old already.”

 

“The rehabilitation will happen once the VSAA kicks in. Pigado na gid ang PDPP and it needs rehabilitation,” Defensor said.      

 

Iloilo City is also affected by the PDPP sale to SPC because it draws 15MW from Napocor to fill up the metropolis’ power shortage.

By Francis Allan L. Angelo

 

WILL the Visayas Supply Augmentation Auction (VSAA) program mulled by energy agencies curb the acute power shortage in Panay Island?

 

The VSAA is the only solution presented by the Department of Energy (DoE) to Ilonggo officials who riled at the agency’s failure to look for stable sources of electricity what with the continuing growth in demand of the island and privatization of National Power Corp. (NPC) assets.

 

The implementation of VSAA was directed pursuant to DoE’s Department Circular No. DC 2009-01-001 dated January 16, 2009. The circular ordered “DOE attached agencies, all electric power industry, participants, consumers and various stakeholders to adapt and implement contingency measures to ensure adequate and reliable electric power supply in Visayas Grid particularly in the islands of Cebu, Negros and Panay.”

 

VSAA was an offshoot of the DoE-led energy summit at the Cebu Waterfront Hotel January 14-16.

 

The summit confirmed the shortage of reserved electricity in the Cebu-Negros-Panay (CNP) power grid.

 

As of December 17, 2008, 7pm, Panay Island lacks 53 megawatts (MW) while Negros is short by 57MW.

 

Panay is suffering from rotating brownouts ranging from 30 minutes to 9 hours. Negros needs 240MW by 2010 on top of its present capacity of 109MW.

 

Cebu province lacks 291MW with Mactan Island accounting for about 65MW while the power deficit in Bohol reached 38.70MW.

 

The Leyte-Samar enjoys a 352.70MW surplus but it is not enough to fill in the 439.7MW total power deficit of Visayas region.

 

WHAT IS VSAA?

 

The VSAA will be administered by the Philippine Electricity Market Corp. (PEMC).

 

Eric Niño Louis, PEMC training officer, said VSAA is a day-ahead market which would allow embedded generators to sell their un-contracted capacity and grid-connected customers to sell an interruptible portion of their loads through an auction process.

 

The VSAA is a form of demand-management as it would allow participants to manage their loads as well as to run their self-generation facilities, as means to ease the supply deficit and augment supply in the region, Louis added.

 

The embedded plants, which include generators of private businesses, should register with PEMC before they can participate in the auction.

 

The VSAA is expected to provide relief to electricity consumers in the Visayas region from rolling blackouts due to supply deficits within the region.

 

Even with cost recovery, the economic impact of the VSAA is seen to be positive as business and commercial establishments benefit from clean, uninterrupted and reliable electricity supply.

 

This increase in economic activity can spur new jobs, products and services – offsetting any effect of a marginal increase in electricity prices, when looked at the overall socio-economic perspective.

 

The Energy Regulatory Commission (ERC) will establish and enforce the pricing mechanisms of the auction. It will also act on recovery and return on demand-side management projects.   

 

Due to the financial incentive to supply into the region, it is hoped that companies would then be encouraged to maintain their generating capacities at an optimum level, thereby decreasing occurrences of forced outages.

 

Louis said they have identified 110 power generation units embedded in Visayas area, mostly diesel-fired generators.

 

But the PEMC has yet to determine the capacity of the said generators pending their registration with VSAA.

 

“Once the interested generators register, we will determine their capacity,” Louis said.

 

Under the VSAA, power generators who sacrificed their own supply to fill in the deficiency of the region will be compensated to recover cost of plant operation or load interruption.

 

The acute power problems of Visayas, particularly Panay, took a worse turn with the looming takeover of NPC plants in Dingle, Iloilo and Bohol Island.

 

SPC Power Corp., which bought the Dingle and Bohol facilities for more than US$5 million, has yet to categorically assure that it will run the plants after the March 26 turnover.

 

Electric cooperatives in Iloilo are riling at the privatization of the Dingle plant as SPC might not run the facility if cooperatives don’t agree with the true cost of power which is more expensive than NPC’s subsidized rates.

 

The Regional Development Council’s infrastructure development committee headed by Iloilo City Mayor Jerry Treñas has issued a resolution asking President Gloria Arroyo to defer the turnover of the Dingle plant to SPC.

 

CHALLENGES

 

The current power supply situation in Visayas “is at a critical level as the current levels of electric power supply in the Visayas grid is inadequate to meet the demand in the region,” the VSAA primer said.

 

In the Power Development Plan (PDP) of the Philippine Department of Energy (DOE) showing the supply-demand outlook for 2006-2014, it is reported that Visayas electricity demand requirements should be addressed immediately to prevent power outages in the Cebu, Negros and Panay islands.

 

The consumers in these regions are presently suffering from looming power shortage during peak hours resulting in increasing incidents of outages until sufficient new base-load capacity is put online.

 

Energy officials already declared the Visayas grid to be in a status of “red alert” indicating that the current available capacity is inadequate to meet both demand and reserve requirements.   

 

New generation plants that will operate in the Visayas are expected to be operational by the years 2010 and 2011.

 

The development of generation capacity, however, is hampered by prevailing regulated electricity rates that are below the cost of production for most generators. In the absence of transparency in the true cost of power, private sector generators are not encouraged to operate nor invest in new capacities.

 

 

By Francis Allan L. Angelo

 

THE turnover of Panay Diesel-fired Power Plant (PDPP) in Dingle, Iloilo to SPC Power Corp. will go on as scheduled.

 

Presidential adviser for Western Visayas Raul Banias said the national government will not delay the March 26 turnover of the plant to SPC despite apprehensions that it will worsen the power crisis in Panay Island.

 

Banias said delaying the PDPP turnover is one of the proposals they presented to President Gloria Arroyo and the Department of Energy (DOE) to prevent the power shortage from deteriorating.

 

But Banias said Energy Secretary Angelo Reyes rejected the proposed solution as the sale was already consummated.

 

Reyes also disapproved the transfer of Power Barge 104 in Davao City as it is scheduled for maintenance and repair.

 

“Secretary Reyes instead pushed for power augmentation program which they expect to arrest the looming shortage,” Banias said.

 

The DOE will mount an energy summit with the National Power Corp. (Napocor), SPC and other power sector stakeholders in the island to discuss and solve the energy crisis.

 

SPC Power Corp. (SPC), formerly Salcon Power Corp., won the bidding for the 146.5-megawatt (MW) Panay and 22-MW Bohol diesel power plants.

 

The Power Sector Assets and Liabilities Management Corp. (PSALM), which oversees the sale of government’s power assets, said SPC outbid two other firms after submitting the highest offer of $5.86 million for the two plants.

 

Atty. Conrad Tolentino, PSALM spokesman, allayed fears that SPC will not operate PDPP after March 26.

 

Tolentino said while there is no assurance from SPC, it is more logical for the firm to operate the plant so it can recoup its investments.

 

“SPC will lose more if it does not run PDPP,” Tolentino said over Bombo Radyo-Iloilo.

 

Tolentino also said that SPC must first seek the approval of the Energy Regulatory Commission before it can jack up prices of electricity. 

 

Energy industry sources said SPC is hesitant to operate PDPP because of the price of electricity.

 

SPC will only run the plant if electric cooperatives agree to pay for the real cost of power which is more expensive than Napocor’s subsidized rates.  

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