Wednesday, July 31, 2013

Meralco expands open access market

Manila Bulletin 
Published: July 31, 2013 
Power utility giant Manila Electric Company (Meralco) is eyeing to widen its market base up to Visayas, via its retail electricity supplier unit MPower which was formed to cater to its targeted customers under retail competition and open access or RCOA.
Company President Oscar S. Reyes categorically stated that the company will calculatedly “expand its target market beyond our franchise area.”
He stressed that they will be looking at other opportunities – primarily for customers wanting to be part of the competitive retail market of the restructured electricity sector.
According to Meralco first vice president Ivanna G. dela Pena, of the 239 customers which enlisted as open access participants via central registration body Philippine Electricity Market Corporation (PEMC), 238 are from the Meralco franchise area.
And of that chunk, 151 have opted to sign up for contracts with Meralco’s MPower; which the company considers as a manifestation of continued patronage of their core ‘big load customers’.
Reyes further intimated that with MPower, Meralco “has been privileged to have been selected as the supplier of choice by a majority of contestable customers in our franchise area.”
Dela Pena said retail competition will be highly beneficial to industries or commercial end-users with high capacity factor, hence, many of the initial participants are from these segments.
Eligible contestable customers or RCOA participants are those within the 1.0 megawatt peak load demand bracket as prescribed by the rules.
The covered domains will be Luzon and Visayas; with Mindanao coming in only after the privatization of most of the generation assets serving the area.
The power industry’s competitive regime in the retail segment commenced June 26 this year, but with some birth pains still being addressed by all stakeholders.
These include open access policy enforcements at some industrial domains administered by the Philippine Economic Zone Authority (PEZA); as well as the tax treatment concerns set for the power industry.  source

ALECO supply cut-off enforced

Manila Bulletin 
Published: July 31, 2013 
For failing to settle outstanding obligations of P56 million, the power supply of Albay Electric Cooperative (ALECO) was cut-off on Tuesday at 12noon, rendering 169,000 customers to suffer brownouts.
In an interview with ALECO acting general manager Veronica T. Briones, she disclosed that they were able to pay P12 million on Tuesday, “but we still have a balance of P56 million.”
She stressed that they were holding meeting yesterday to possibly raise additional cash to pay their creditors via Philippine Electricity Market Corporation (PEMC), the operator of the Wholesale Electricity Spot Market.
“We are hoping that we can raise the amount as required by PEMC for re-connection. We hope to have this resolved by tomorrow (Wednesday),” she said.
Energy Secretary Carlos Jericho Petilla noted that the government cannot do anything because it is an incumbent obligation of the utilities to pay their suppliers, and failing to do that, they are made aware that the outcome will be supply cut-off which will then render their customers to experience power interruptions.
Briones emphasized that if they would be able to partially pay PEMC on their outstanding obligations, they will adhere to the imposed condition that the top 100 delinquent, non-paying big load customers, will continually be cut-off.
This was echoed by Petilla, stressing that the supply disconnection will remain for these “delinquent customers” until a rehabilitation plan is firmed up for ALECO.
“We have already identified the top 100 delinquent customers and have submitted the list to PEMC,” Briones added.
Setting ALECO into a tip-top operating condition has been a lingering challenge for both the government and the power utility itself. (MMV)  source

P1.5-B Mini-Hydro Plant provides ‘Clean’ energy for Oriental Mindoro

Manila Bulletin 
By Myrna M. Velasco 
Published: July 31, 2013 
From traditional dependence on bunker-C fired power generation, Oriental Mindoro is shifting to a ‘cleaner option” with the P1.5-billion mini-hydro power plant being developed by local firm Ormin Power, Inc., a subsidiary of listed company Jolliville Holdings Corporation.
At the proposed facility’s groundbreaking rites, Energy Secretary Carlos Jericho Petilla said the 10-megawatt project will be the answer to the area’s bid for dependable and competitively-priced energy supply.
He stressed that the government’s “commitment is to make sure that we have sustainable energy, to make it affordable, and to make it rightly-priced.” The plant is targeted for commercial commissioning in 2016.
The output of the facility will be sold to Oriental Mindoro Electric Cooperative, Inc. (Ormeco), which serves 14 municipalities and Calapan City.
The energy chief similarly bared the government’s plan to put up a renewable energy hub in Batangas, which will stretch all the way to Mindoro. Petilla sees that happening “in two to three years time”; and will be an added significant detail in the National Renewable Energy Program.
Between two basic commodities of water and electricity, Petilla articulated that power supply ranks higher given its multiplier effect on an area’s economy.
On the project developer’s part, Jolliville Holdings chairman and chief executive officer Jolly Ting averred that “the hydro power plant will help stabilize power to contribute to the growth of Oriental Mindoro.”
For the local officials like Governor Alfonso Umali, the hydro power plant “will solve the close to four- hour power outages in the island-province.”
Ormin Power is considerably an entrenched investor in the province as it has also been operating the 6.4-megawatt bunker fuel power facility in Calapan City, or the so-called “Gateway to the Golden Isle” given its bustling economy anchored on its offer of coastal paradise to tourists.   source

Albay loses power supply over co-op’s P56.7-M debt

 (The Philippine Star) 

LEGAZPI CITY, Philippines – The 15 towns and three cities of Albay plunged into darkness at noon yesterday after the National Grid Corp. of the Philippines cut off power to the Albay Electric Cooperative (Aleco) for failing to pay its remaining P56.7-million debt to its private power creditor, the Philippine Electricity Market Corp. (PEMC).
Aleco spokesperson Hazel Morallo said the cooperative only managed to pay P11 million of its total P67.7-million debt for its June 25 billing cutoff.
Morallo said the PEMC would only resume supplying power to Aleco should it settle its unpaid billing for June, and submit a list of its top 100 delinquent consumers in each of the three districts of Albay.
“These are the two conditions given to us by PEMC if we want reconnection of our power supply any time. But a reconnection is not possible today because it is now difficult to collect our collectibles now that the power is already cut off,” Morallo told The STAR.
Albay Gov. Joey Salceda said he was trying to do his best to lessen the impact of the power cutoff, particularly to the business sector.
“I’m working hard and pleading with energy authorities and corporate boards to secure an ‘immediate selective reconnection’ because a disconnection has inevitable disruptive economic impacts and bad signals on Albay’s image to our national and global constituencies,” Salceda said in an e-mail to The STAR.
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“But it would be worse, if this sorry event would not prompt long-term reforms to secure that these would not recur and if possible Aleco would become a positive force in Albay development,” he added.
Salceda even thanked Energy Secretary Jericho Petilla for delaying the power cutoff to up to 15 days to find ways to solve the Aleco crisis.
“Yes, it is a disconnection which we were able to hold at bay for 15 years with state-owned Napocor and three years with the private PEMC. I did my best. Aleco had to pay only the current. DOE Secretary Petilla was already very generous and kind in agreeing to our position during protracted meetings on July 2, 8 and 9 that collections on the P1 billion for PEMC and P3 billion for PSALM be deferred,” Salceda said. – With Celso Amo   source

Philex, Meralco in talks for power plant jv in Surigao

 (The Philippine Star) 

MANILA, Philippines - Philex Mining Corp. and Manila Electric Co. (Meralco) are in talks for the possibility of putting up a 50-80 megawatt coal-fired plant in Surigao del Norte, their chairman Manuel V. Pangilinan said.
Under the plan, Meralco, through Meralco Powergen Corp., is eyeing a joint venture with Global Business Power Corp. of the Metrobank Group to build and operate the power plant which would be used to supply electricity to Philex Mining.
“There’s a broad understanding (with Global Business Power),” Pangilinan said when asked if the joint venture has been finalized.
Early this year, Meralco Powergen and Global Business signed an agreement for potential power projects in Mindanao.
Pangilinan said the project is related to the mining firm’s mines in the province.
He said that for Philex to proceed, it would need 50 to 80 MW of power capacity with the remaining – if any – may be sold to other off-takers.
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The target for the commercial operation of the mine is 2017, Pangilinan said, but declined to provide investment figures.
He said earlier that Philex continues to invest about P10 billon each year for the development of the mine.
The company’s Silangan project in Surigao del Norte is located at the northern part of Mindanao and combines the development of the Boyongan and Bayugo deposits, which are comprised of gold, copper, and silver.
In February 2009, Philex Mining consolidated its interest in Silangan by purchasing the remaining 50 percent equity interest held by Anglo American Exploration BV and Anglo American Exploration (Philippines) Inc. for $55 million, the company said.  source

Tuesday, July 30, 2013

Power firm’s project advances

By Maria Elena Catajan
Tuesday, July 30, 2013
LA TRINIDAD, Benguet -- The Kapangan–Coheco hydroelectric project will advance will now undergo a consolidation process, said National Commission on Indigenous People (NCIP) regional director Sancho Buquing. 
Buquing said the final consolidation process will follow after the successful memorandum of agreement signing is tackled by a regional review board for scrutiny.
He assured there will still be time to fill in final corrections from the people concerns they still have on the Korean led project. 

The final consolidation stages will still undergo extensive review from the office of Buquing as well as an executive screening by the NCIP.
“There will still be room for review, it is still a process,” he said. 
Kapangan elders earlier gave their nod to the 120 megawatt (MW) plant. 
Coheco is set to install a run-of-river mini hydro power plant by tapping waters of the Amburayan River. It plans to build a weir at Barangay Cuba, with the water to be conveyed by a 7.5-kilometer tunnel passing through parts of barangays Pudong, Sagubo then to Gaddang. 
Previously, opposition groups for the project fear loss of water in the area, an effect; the tunneling is feared to create. 
Buquing said community fears can still be put in the final stages of the consolidation before endorsing the project to the main office of the NCIP for final deliberation. 
In the final deliberation Indigenous Peoples representatives will still be called to air reaming concerns for the project. 
Alternatives in the tunneling have been suggested to be presented to Kapangan folk, in order to appease fears and get more people to agree to the project. 
If there are valid concerns and setbacks seen in this phase, the NCIP will direct the company to go back to complete all requirements and concerns anew.  source

Power debt plunges Albay in darkness

July 30, 2013 9:59 pm
The entire province of Albay was left groping in the dark on Tuesday after the National Grid Corporation of the Philippines (NGCP) ordered the province’s power cut off because of the unpaid P1.4 billion debt of the Albay Electric Cooperative (Aleco) which supplies electricity to the province.
Albay Rep. Edcel “Grex” Lagman, Jr. said that 15 towns and three cities were without electricity.
Lagman said it was the Philippine Electricity Market Corporation (PEMC), the operator of the Wholesale Electricity Spot Market (WESM), that wanted the province taken off the grid. The PEMC Board is chaired by Energy Secretary Jericho Petilla.
Aleco, the seventh largest electric cooperative in the country, has been saddled with financial problems for years. Its debts to electricity service providers and the National Electrification Administration (NEA) have ballooned to almost P4 billion.
“This is a very sad and dark day for Albayanos. Despite being the energy-richest province in the country with two geothermal energy resources, we will be without electricity in the coming days. We are used to devastations brought about by typhoons and volcanic eruptions but this will be the first time a man-made disaster such as this will hit our province,” Lagman lamented.
“Aleco has been in dire straits financially for many years but then, what has the provincial government done to rectify this? On the contrary, a top local politician has politicized Aleco leading to mismanagement, corruption and financial woes,” Lagman added.
Lagman did not name names, but Albay’s top official is Gov. Joey Salceda, who is a member of the ruling Liberal Party.
“I appeal to Secretary Petilla, Chairperson of the PEMC Board, to immediately restore electric power service in my province to spare paying consumers and the economy from the delinquencies of the old Aleco board and its political patron. He should likewise look into the merits of the various proposals to bail out Aleco, including privatization,” Lagman, the son of former House minority leader Edcel Lagman, said.
The lawmaker sought a congressional inquiry into the Aleco mess, saying that other electric cooperatives in the country “may be in the same boat or are headed there.’’
The blackout triggered an outcry from the populace, with critics blaming Aleco’s previous management for its inefficient leadership, high system losses at the rate of 24 to 27 percent or about P27 million a month, poor collection, power pilferage, antiquated power transformers and alleged corruption.
Petilla had pleaded with Aleco to partially settle its debt but the cooperative failed to raise enough money.
According to Legazpi City Mayor Noel Rosal, the mayors’ league had asked that the power disconnection be deferred by two more days hoping Aleco would be able to gather funds to pay its current bill of P67 million.
Salceda meanwhile said he tried to have a selective reconnection but failed.
“Yes it is a disconnection which we were able to hold at bay for 15 years with state owned Napocor and three years with private PEMC. I did my best. Aleco had to pay only the current (bill),” he told The Manila Times.
“I am working hard and pleading with energy authorities and corporate boards to secure an “immediate selective reconnection” because a disconnection has inevitable disruptive economic impacts and bad signals on the Albay image to our national and global constituencies. But it would be worse, if this sorry event would not prompt long term reforms to secure that these would not recur and if possible Aleco would become a positive force in Albay,” he said.
“Selective reconnection” means some 100 heavy loads will no longer be serviced, Salceda explained. “Immediate” means in “as early as two days” but “no more than 1 week” because the poor who share no blame “are made to pay for the sins of the oppressive rich who pursue unli-profit on the back of the ordinary working families,” Salceda said.   source

Aleco finally disconnected

Business Mirror

Published on Tuesday, 30 July 2013 19:34
Written by Manly M. Ugalde / Correspondent

LEGAZPI CITY—After years of being unable to pay a P4-billion debt capped by seven days of failed negotiations, the National Electrification Administration (NEA) finally disconnected the Albay Electric Cooperative (Aleco) from the power grid at 12 p.m. on Tuesday.
Aside from the P4-billion debt accumulated over the years, Aleco owes P67 million more in current electric bills.
The disconnection will be in effect for at least two days, during which time it will be given the chance to pay at least the P67 million it currently owes in unpaid electric bills.
Aleco is servicing more than 200,000 consumers in Legazpi City.  It is known as the third-biggest cooperative in the country and among the 10 worst. It has the highest system loss at 24 percent among the country’s active cooperatives.
Albay Gov. Joey Sarte Salceda said the disconnection was devastating for the province’s economy and very disruptive if not reconnected soon. Albay, under Salceda, is in the middle of outstanding strides in tourism development and environmental leadership.
The NEA, which has managed Aleco since 2011, has been negotiating with the Department of Energy to forestall the disconnection threat scheduled on July 22, then July 28 and, finally, July 30.
Energy Secretary Jericho Petilla pleaded with NEA-Aleco to at least settle the current P67 million it owes in unpaid power bills to spare Albay from the current power cutoff, a threat which Aleco often encountered and avoided, thanks to interventions by powerful politicians, including Malacañang.
Legazpi City Mayor Noel Rosal said the mayors’ league had pleaded that the disconnection be extended for at least two more days. Rosal and other local politicians had hoped Aleco would meet the P67-million minimum payment required from collections, but the Department of Energy (DOE) declared there was nothing they can do anymore. Aside from the current P67-million bills with the Philippine Electricity Market Corp. (PEMC), Aleco has an unsettled P1.2-billion debt in accumulated PEMC electricity bills. 
This, despite the creation of the controversial Special Payment Agreement (SPA), a scheme started in September 2011 to raise payment exclusive for the PEMC bills until 2014. The SPA is from the consumers’ advanced payment inserted in the monthly billings equivalent to at least 10 percent of their consumption.
NEA-Aleco Project Supervisor Veronica Briones and Legazpi Diocese Bishop Joel Baylon, the designated chairman of the Nea-created Aleco interim board, said the SPA collection is directly collected from the SPA and is being remitted directly to PEMC, according to its scheme and as approved by the Energy Regulatory Board.
Aleco is currently locked in a court battle at the Regional Trial Court here after its scheduled bidding to privatize was blocked by a court order upon petition of the Aleco Multi-Sectoral Stakeholders Organization (AMSSO), led by its president, lawyer Bartolome Rayco.  AMSSO is pushing for a cooperative-to-cooperative operation to save Aleco from its present situation.
On June 16, however, AMSSO received a letter from the PEMC president, saying that Aleco had so far been paying PEMC on interest basis, which Amsso estimated to have reached more than P55 million only. Briones announced in April that the SPA collection reached only P126 million as of January because of the consumers’ rejection.
Amsso also asked Nea-Aleco as to the whereabouts of the P100-million recovery fund collected since 2011 as approved by ERC specifically for electric bills.
Ephraim de Vera of Aleco and member of AMSSO said collection from the SPA from September 2011 to January 2013 was computed at P165,634.20. With P67 million in current obligations, there is no reason for disconnection, he said, adding that Amsso is suspecting the disconnection  may have something to do with the privatization to kill other viable options.
Salceda assailed the DOE for disconnecting Albay, saying the DOE owes the province some P102 billion for geothermal power contributed to national development over 34 years sourced from Albay’s indigenous geothermal energy.   source

Coal plant shuts down 1st unit for preventive maintenance

By Florienne Melendrez on July 30 2013 3:53 pm

DAVAO CITY (MindaNews/30 July) – Preventive maintenance for the Mindanao Coal-fired Power Plant in Villanueva, Misamis Oriental started last July 15 and will last until August 14, a company official said.
Jerome Soldevilla, communications officer of STEAG State Power Incorporated (SPI) which operates the plant, said in a phone interview the maintenance will only cover one of two units of the 210-megawatt (MW) of the facility.
Each unit carries a capacity of 105 MW, he said, adding the second unit is set for maintenance works on September 21 to October 27.
Soldevilla admitted that shutting down one unit will affect the contribution of the plant to the Mindanao power grid.
“So from 20%, it will probably only account for 10% since half of the total capacity is shut down,” he explained.
But he said they are counting on other sources such as hydropower plants to provide sufficient power to the island.
“The scheduling of the maintenance was actually critical, but we planned to do it during the rainy season since we know there would be enough water supply for hydropower plants to operate and provide more power for the island,” he said.
He also said that the annual preventive maintenance is necessary to make sure their power generators are functioning well.
In a media advisory, SPI said that the goal is “to minimize the impact of any possible power supply shortfall in the island.”
SPI, in partnership with Aboitiz Power Corp. and La Filipina Uygongco Corp., accounts for 20% of Mindanao’s power generation mix.
As of June 2013, SPI said, its plant has provided 9.6 billion kilowatt hours of electricity to the Mindanao grid.
The plant, which sits on a 55.42-hectare location at the PHIVIDEC Industrial Estate in Villanueva, started to operate on November 15, 2006. (Florienne Melendrez/MindaNews)  source

NGCP ordered to pay Tupi P3.7M in taxes

By Allen V. Estabillo on July 30 2013 3:49 pm

GENERAL SANTOS CITY (MindaNews/30 July) — The Local Board of Assessment Appeal (LBAA) of South Cotabato province has ordered the National Grid Corp. of the Philippines (NGCP) to pay the municipal government of Tupi around P3.7 million in realty taxes for its transmission towers and lines within the area.
Herbert Jugador, Tupi municipal assessor, said in a statement the directive was based on a ruling dated June 27, 2013 issued by the board in connection with the NGCP’s tax arrearages to the local government.
He said the company’s tax payments have already ballooned to 3.7 million based on their latest assessment.
The NGCP earlier filed an appeal with the LBAA, questioning the real property tax billing issued by the Tupi treasurer’s office in August last year.
The company cited in its appeal that the properties subjected to local taxation are owned by the National Transmission Corp. or Transco, a government-owned and controlled corporation (GOCC) that is exempted from taxation.
It said the transmission lines with metal steel tower and accessories described as “machineries” are exempt from the payment of real property taxes as their ownership is retained by Transco.
NGCP noted that it is exempted from real property tax payments under Republic Act 9511 as a franchisee of Transco.
Rober Deanon, South Cotabato provincial assessor, and Tupi municipal assessor Herbet Jugador had sought for the dismissal of NGCP’s petition by invoking section 252 of the Local Government Code of 1991, which provides that “no protest shall be entertained unless the taxpayer pays the tax.”
Deanon and Jugador stressed that section 3 of the rules and procedure for appeals filed before LBAA provides a condition for filing an appeal that “no protest or appeal shall be entertained unless the taxpayer first pays the real property tax.”
“These shall be annotated on the tax receipts as paid under protest,” they cited.
The assessors noted that the NGCP is not exempted from paying real property taxes because it is not a GOCC and that the tower lines were not used for generation but for transmission of electric power.
In its four-page ruling, the South Cotabato LBAA ordered the NGCP to pay its taxes before they can act on its protest.
“Any taxpayer can appeal the action of the provincial, city and or municipal assessor which he is not satisfied with but has to pay the taxes due the government before his appeal could be entertained,” the LBAA explained.
The board said “the (tax) issues can be tackled only after the petitioner has paid the taxes under protest.”
The South Cotabato LBAA is composed of representatives from the Land Registration Authority, Department of Justice and the Registry of Deeds. (Allen V. Estabillo/MindaNews)   source

Wanted DOE Undersecretary; Qualification: No energy stint


Manila Bulletin 
By Myrna M. Velasco 
Published: July 30, 2013 

Amid fledgling implementations of energy policies, the scouting spree for a new undersecretary to oversee the affairs of the electric power industry will center on an individual who is “still inexperienced and should have no knowledge about the energy sector.”
Energy Secretary Carlos Jericho Petilla divulged to reporters in a briefing that he prefers tapping an undersecretary who is a “non-energy person.”
To him, that could mean breaking conventions so the appointive official can start on a clean slate, but for the industry, it could set off distress because they will be dealing with an authority who might eternally be on a learning curve.
Stakeholders in various energy industries have long been distraught with the manner of appointments being done in the Department of Energy DOE) and some of its attached agencies – which could be a manifestation of the government’s appalling disregard of such an important sector.
While President Aquino rebuked some agencies which are having “below par performance” in his State of the Nation Address (SONA), he is obviously clueless on how some government-energy firms have been managing their affairs.
For one, the biddings for continuing privatization of the power assets being undertaken by the Power Sector Assets and Liabilities Management Corporation all ended in ‘failed processes.’ The company’s other mandate on liability management has not also been faring well.
Petilla, however, defended the appointment of incoming National Power Corporation (NPC) president Gladys Cruz-Sta.Rita, noting that “she gained energy sector experience via her stint as board director of PNOC (Philippine National Oil Company)” and that will be reinforced by her wide-range exposure with local government affairs.
Sta. Rita will be on board at NPC starting August 1 this year replacing Froilan Tampinco who recently retired from the power firm.
The spotlight of appointments in the energy sector is similarly focused on the Energy Regulatory Commission (ERC) with the entry of former Energy Undersecretary Josefina Patricia M. Asirit as new ERC Commissioner.
Malacañang’s announcement of her appointment highlighted her blood relations with Cabinet Secretary Rene D. Almendras and as a daughter of Cebu vice governor Agnes Magpale, who is also Almendras’s sister.
For the other ERC commissioner post, it was gathered that an ‘energy sector insider’ might get the appointment, but it might entail some slight movement in the DOE family.
Meanwhile, sources from the Palace divulged that Asirit’s application for the ERC Commissioner post was recommended by Petilla through a letter he sent to Malacanang last May. The energy chief reportedly cited Asirit as instrumental “behind EPIRA’s (Electric Power Industry Reform Act) successful implementation,” primarily on the implementation of retail competition and open access in the industry.  source

Meralco income declines to P9.4B

Manila Bulletin 
By Myrna M. Velasco 
Published: July 30, 2013 
The reported net income of power utility giant Manila Electric Company (Meralco) declined slightly to P9.4 billion from last year’s P9.752 billion, but core income was still higher at P9.174 billion during the first half from P9.023 billion.
Meralco chairman Manuel V. Pangilinan laid down this year’s profit guidance of P17 billion from 2012 level of P16.3 billion. Yet he still considers that to be “a modest target.”
Meralco chief finance officer Betty Siy-Yap indicated that there had been increase in sales volume, but the one-time gain logged  in the company’s divestment of Rockwell Land Corporation last year, pushed up its bottom line figure then by additional P770 million.
Without the earnings from Rockwell divestment in the comparative figures, she further explained that the overall income on account of volumes would have been higher.
According to Meralco president Oscar S. Reyes “volume growth was realized across all customer sectors with commercial accounts providing the highest increase,” attributable mainly to new connections and increased consumption.
The growth in demand, according to company executives, had been at average 4 percent year-on-year reaching 16,863 gigawatt hours.
For the second half, a heftier demand expansion of 5 percent is expected.
It has also been stressed that “the slightly higher average distribution rate in 2013 attributable to a better sales mix contributed to the increase in consolidated core net income.”
In terms of revenues, there had been 1.0 percent drop logged by the utility firm to P141.7 billion, mainly due to lower generation costs of its power supply agreements (PSAs) which account for more than 50-percent of its supply.
Company executives have set steady drumbeat on the utility firm’s various power generation forays, including its acquisition in Singapore as well as its proposed Philippine power developments, to be boosting future earnings.
Pangilinan said they are heartened by the pronouncement of support set forth by President Aquino in his State of the Nation Address, with him noting that it “is an encouragement … we get a better hearing from government when it comes to our power plant projects.”
Meralco senior vice president Alfredo S. Panlilio similarly presented “new growth areas” when it comes to demand; courtesy of developments at the Entertainment City.
This is seen shoring up the utility firm’s sales when the tourism-entertainment facilities would kick off operations around 2014 to 2015. These will include the projects of Belle Corporation, Manila Bay Resorts and Travellers International.
For the Singapore liquefied natural gas (LNG) facility acquisition, it was noted that the first unit at its commissioning phase, already reached baseload generation level of 400 megawatts.   source

Meralco core income up 2% to P9.2 B

 (The Philippine Star) 

MANILA, Philippines - Manila Electric Co., the country’s biggest power distributor, expects a consolidated core net income of P17 billion this year, higher than the P16 billion posted last year, Meralco chairman Manuel V. Pangilinan said in a briefing yesterday.
 “Given our first half results and the positive outlook for the second half of the year, we are prepared to guide our full year 2013 consolidated core net income at P17 billion,” he said.
During yesterday’s briefing, Meralco chief finance officer Betty Siy-Yap reported that the power firm’s core net income in the first half of the year rose two percent to P9.2 billion from P9 billion in the first half last year.
However, Meralco said its reported net income of P9.4 billion in the first half was three percent lower than the year-ago level on the absence of one-time gains from the sale of Meralco’s shares in Rockwell.
 “We didn’t have a one-time gain such as the Rockwell transaction,” Mercalco president Oscar Reyes said.
“Reported net income remains strong because we recognize a gain from the divestment of Rockwell shares and other taxes totaling P1.6 billion net of tax,” Siy-Yap also said.
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Consolidated revenues stood at P141.7 billion in the six-month period, one percent lower year-on-year partly due to lower generation cost from power sales agreements.
“The lower revenue for the six months of 2013 was the result of lower generation cost from power sales agreements negotiated by Meralco after the expiration of the less competitive transition supply contracts of the National Power Corp. in December 2012 – despite higher volume of power sold and average distribution rate,” Meralco said in a report.
Total electricity sales volume, meanwhile, grew four percent year-on-year to 16,863 gigawatt-hours (gwh).
Reyes said the growth in volume was realized across all customer sectors with commercial accounts providing the highest increase, attributable to new connections and increased consumption.   source

PSALM bids out P1.2-B Ilijan fuel

Manila Bulletin 
By Myrna M. Velasco 
Published: July 30, 2013 

With the scheduled maintenance shutdown of the Malampaya gas production facility latter part of this year, the Power Sector Assets and Liabilities Management Corporation (PSALM) is now advancing procurement of P1.208 billion worth of fuel supply for the 1,200-megawatt Ilijan gas-fired power facility.
The Ilijan plant will need to shift fuel use to diesel during the gas field’s downtime for routine maintenance around November this year.
While the supply contract of the Ilijan plant is now under independent power producer administration (IPPA) arrangement with South Premiere Power Corporation (SPPC) of the San Miguel group, fuel procurement had remained a responsibility of PSALM – taking cue from its transferred obligations from the National Power Corporation.
PSALM, in its tender notice, has enjoined interested parties to start securing bidding documents on July 26, leading to the scheduled pre-bid conference on August 2 this year. Submission of bids is slated August 14.
The terms of reference specified that “bidders should have completed, within 5 years from the date of submission and receipt of bids, a contract similar to the project” and must be “equivalent to 25-percent of the approved budget cost.”
At auction date, PSALM noted that “bids will be opened in the presence of the bidders’ representatives who (will) choose to attend.”
Apart from the solicited tenders for diesel fuel, the procurement set by PSALM will also cover fuel additives and lubricants.
Energy Secretary Carlos Jericho Petilla told reporters that preparations are already being set for the shutdown of the gas facility, which is the major source of fuel for bulk of the generation units supplying the electricity needs of Luzon grid.
Apart from the Ilijan plant, the two other gas-fired power generation facilities of First Gen in Batangas – the 1,000-megawatt Sta. Rita and 500-MW San Lorenzo plants – are also anticipated to shift to liquid fuels.
During these periods when fuel use shifts are enforced, electricity rates may experience up-ticks because global oil commodities are pricier compared to gas.  source

Conspiracy eyed in Isabela electric coop heist

 (The Philippine Star) 

Senior Superintendent Sotero Ramos, provincial police director, told The STAR that a lineman and a security guard of the cooperative belied the claims of cashier Julieta Ramil, 35, that a man barged into the office and took the P2 million at knifepoint.
Ramos said investigators have also found Ramil’s collection of P175,000 intact in her drawer while the P2 million was recovered at her home in Angadanan town.
He said Ramil confessed that she took the P2 million.
Ramos said they would also question some officers of the electric cooperative for their failure to deposit the amount in the bank.  source

Misamis power plant shut down for repairs

 (The Philippine Star) 

DAVAO CITY, Philippines – Mindanao is expected to experience a temporary power shortage as the STEAG State Power, Inc. (SPI) will shut down its coal-fired plant in Misamis Oriental as part of its preventive maintenance schedule (PMS).
The PMS will involve at least 210 megawatts, with the first 105 MW scheduled today until Aug. 14, while the second 105 MW will be from Sept. 21 to Oct. 27, said SPI spokesman Jerome Soldevilla.
Soldevilla said the planned PMS has been coordinated closely with the National Power Corp. (NPC) and the grid operator National Grid Corp. of the Philippines (NGCP).
SPI plant manager Carsten Evers said the preventive maintenance works need to be carried out to ensure efficiency and reliability of its two power-generating units.
Evers said in determining the timing of the PMS, SPI takes into consideration the power plant’s operations and maintenance guidelines including the anticipated electricity demand-supply condition of the region during the period.
He said since start of the operations of the coal-fired plant in 2006, SPI has sustained a high availability rate of 93 percent and an unplanned outage rate of less than one percent.
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SPI’s power plant is considered to be the most modern and the biggest in Mindanao on a per unit capacity. It accounts for about 20 percent of the island’s electric generation mix.   source

Monday, July 29, 2013

NEA reform IRR released

Business World Online
Posted on July 29, 2013 11:08:06 PM

THE ENERGY department issued yesterday the implementing rules and regulations (IRR) of a law to strengthen and empower the National Electrification Administration (NEA) and electric cooperatives (ECs) in the country.

President Benigno S. C. Aquino III, in May, signed into law the National Electrification Administration Reform Act of 2013 (Republic Act 10531), which amended the NEA charter (Presidential Decree 269).

NEA is the agency in charge of overseeing the operations of 109 ECs across the country.

The NEA Reform Act prohibits relatives of public officials from being elected to the board of directors of ECs.

The said law also allows NEA to suspend delinquent board members of ECs.

In a circular published yesterday, the Energy department issued the law’s IRR, which provides “the framework of structural reforms of the NEA and ECs in pursuit of the country’s total electrification in an accelerated and sustainable manner....”

The law, according to the IRR, aims to promote sustainable development in rural areas through rural electrification.

The said law aims to empower and strengthen NEA to pursue the electrification program, providing electricity through the ECs to the countryside and other economically unviable areas.

It is also to empower and enable ECs to cope with the changes brought about by the restructuring of the electric power industry as provided in the Electric Power Industry Reform Act of 2001 (EPIRA; RA 9136).

Also, the IRR outlines the powers, functions and privileges of NEA. The agency, in order to strengthen the ECs, should “help them become economically viable and prepare them for the implementation of retail competition and open access....”

NEA should also ensure that all ECs comply with the timely submission of reportorial requirements. For its part, the agency should also prepare monthly and quarterly assessment reports on the ECs.

These reports, along with recommended policies to attain the objectives of the law, will be submitted by NEA to the Energy department and the Joint Congressional Power Commission.

NEA’s authorized capital stock is also increased to P25 billion, divided into 250 million shares with a par value of P100.

Under the EPIRA, NEA’s capital stock was P15 billion.

The law also gave NEA additional power over the ECs. The agency, as provided by the IRR, has the authority to issue orders, rules, and regulations and to conduct investigations on matters affecting ECs.

Likewise, the agency can issue preventive and disciplinary measures, including the suspension or removal and replacement of any or all of the members of the board of directors and officers of the ECs. It can also appoint independent board of directors in the ECs.

NEA was also given step-in right in cases of ailing ECs. “The NEA shall immediately step in and take over from its Board the operations of an ailing EC,” the IRR read.

“Within 190 days after takeover, the NEA may convert the ailing EC to either a stock cooperative registered with the CDA (Cooperative Development Authority) or a stock corporation registered with the SEC (Securities and Exchange Commission),” the IRR also said.

As for the ECs themselves, the IRR specified their mandates, power, functions and privileges. The ECs are allowed to participate in the bidding for National Power Corp. -- Small Power Utilities Group generating facilities, provided that there is no other qualified bidder.

“To ensure the long-term business and economic viability of ECs, the management, operations and strategic planning of ECs shall... be insulated from local politics,” the IRR also reads.

This means that a person may not be part of the board of directors or an officer if he/she or his/her spouse holds public office or has been a candidate in the last preceding local or national elections.

The IRR will take effect within 15 days of publication, or by the middle of next month. --C.A.M.C. Feliciano   source