Economy


Power supply shortage seen worsening in South




Posted on February 24, 2012


CAGAYAN DE ORO -- Limited power generation capacity amid a growing demand is not about to improve worsening blackouts in Mindanao even as officials expect a widening deficiency into the summer months.

The National Grid Corporation of the Philippines (NGCP), the private sector operator of the state-owned transmission grid, is projecting an average shortage of 179 megawatts (MW) for the island next month to as high as 345 MW in April.

In a power sector forum organized by the Cagayan de Oro Chamber of Commerce and Industry Foundation, Inc. on Monday, Eugene H. Bicar, assistant vice-president for Mindanao systems operations of NGCP, showed that from the 727 MW of installed capacity, the current peak capability of the Agus hydropower plants is only 467 MW.

The lower output can be traced to several issues, officials said.

Pedro C. Ambos, Jr., National Power Corp. (Napocor) officer-in-charge for operation and planning, explained in the same forum that the state power firm could not operate the hydropower plants at maximum capacity as the discharge of water that will allow such output will flood low-lying areas in Lanao del Sur province where the plants are located.

Agus 1, for example, is limited to 45 MW from its 80-MW installed capacity, even as the power needs of the distribution utilities in the last quarter have outstripped the allocation in their contracts with Napocor, he said.

Mr. Ambos also admitted that Napocor’s funds for maintenance and operations have been cut in preparation for the planned privatization of the power plants.

Construction of infrastructure to protect communities from possible flooding, he added, is being undertaken by the Department of Public Works and Highways.

NGCP’s Mr. Bicar, for his part, stated the company’s position that Mindanao’s power woes are due to generation deficiency and not due to failure to renew Ancillary Service Procurement Agreement with power barges.

"We could not construct a power plant," he said.

The island’s normal power requirement ranges from 1,400 MW during weekdays to 1,200 MW on weekends. As of yesterday, NGCP’s Web site showed a 130-MW deficiency, or roughly 10.4% of the day’s demand.

Two years ago, at the height of a dry spell, the island’s power deficiency reached as high as 600 MW resulting in power outages as long as 10 hours daily in many parts of the island.

Independent power producers as well as backup plants of some utilities have cushioned the impact of the problem in urban centers, specifically in Davao, where the outage in 2010 was downscaled to two hours daily from the projected four hours.

Meanwhile, the Mindanao Coalition of Power Consumers has sent out a petition to discontinue the implementation of the Leyte-Mindanao Interconnection Project of the NGCP.

"We believe that there is no need to carry out the phase 1 work, despite its approval by the Energy Regulatory Commission, as it is no longer economically feasible to carry out the main project itself," the petition reads.

The coalition noted that the project was deemed feasible in the mid-’90s when power was considered to be transmitted from the geothermal plants in Leyte. However, with the present power requirements in Luzon and the Visayas, the power generated in Leyte would not be enough to supply Mindanao as well.

"And for the next 10 years, no assurance can be given by the NGCP, or anyone else, as to the availability of relatively cheap power from the Visayas for export to Mindanao through the (Leyte-Mindanao interconnection project)," the group said.

"Therefore, Mindanao would not get adequate economic benefits from the construction of the (interconnection project).

NGCP officials were not immediately available for comment.

POWER CURTAILMENT

Due to insufficient power supply in the Mindanao grid, meanwhile, residential and business establishments in General Santos City and two neighboring provinces will have to suffer daily rotating one-hour outages for about two weeks, an official said.

Rodolfo G. Ocat, South Cotabato Electric Cooperative II (Socoteco II) general manager, said the blackouts will last until March 4.

The electric cooperative implemented the load shedding on Wednesday, spanning a total of 10 hours from 10 a.m. to 8 p.m.

"As your distribution utility, Socoteco II appeals for public understanding on this matter, which is beyond its capacity to control," Mr. Ocat said.

Socoteco II solely serves the entire General Santos City, the "Tuna Capital of the Philippines," and Sarangani province and parts of South Cotabato, all under Region 12, or Central Mindanao.

Mr. Ocat said the NGCP has issued an advisory that the Mindanao grid is on red alert status, with zero contingency reserve due to generation deficiency.

Owing to the supply lack, he said he has asked consumers to adopt conservation measures especially from 10 a.m. to 8 p.m.

He noted that Therma Marine, Inc., a subsidiary of Aboitiz Power Corp., is augmenting the power needs of the cooperative.

Napocor has reduced its power allocation to Socoteco II, reportedly by 32 megawatts starting this year, due to the dwindling capacity of its hydropower plants in Bukidnon and the Lanao provinces.

Last year, Socoteco II forged a supply deal for 18 MW with Therma Marine in anticipation of the expected load shortage due to insufficient generation capacities.

For her part, Cynthia P. Alabanza, NGCP spokesperson, said the load curtailment and power interruptions in parts of Mindanao have been due to the generation deficiency of power plants.

At present, the power plants of Napocor and the other privately owned generating firms cannot meet the demand of customers connected to the grid, she said

Ms. Alabanza said NGCP implements load curtailment when the power supply is insufficient to ensure the grid’s security and reliability.

Ideally, the Mindanao grid must have a 150-MW reserve capacity to ensure the facility’s stability, the firm said.

The level of curtailment is based on the matrix of load being maintained and regularly issued by the Power Sector Assets and Liabilities Management Corp./ Napocor, NGCP said.

HIGHER RATES

In Davao City, customers of the Aboitiz-led Davao Light and Power Co. will pay an additional P0.2276 per kilowatt-hour (kWh) this month as Napocor started to impose its so-called dry season rate.

Mindanao’s power supply is heavily dependent on hydroelectric power.

Rossano C. Luga, company spokesperson, explained that the rate has been applied since two years ago based on the imposition of the state-run power company.

"This maybe the first time for you to hear this, but this is a recurring rate from Napocor," he said.

Mr. Luga explained that by taking into account the increase in the generation charge and the reduction in transmission charge, a residential user consuming 175 kWh will have to pay an additional P29.41. Current effective power rate, including other charges, for residential accounts consuming about 300 kWh is about P7.85/kWh.

Dry season is in January until June, while the rest is considered wet season. Napocor has started to charge a higher dry season rate this month. Napocor officials were unavailable for comment.

Davao Light, however, said the transmission charge based on the billing from the NGCP will be lower by P0.0665/kWh as a result of lower ancillary charges. Ancillary charges are imposed on power consumed from sources that only operate as needed. -- Louise G. Dumas, Romer S. Sarmiento and Carmelito Q. Francisco