Business Mirror
21 Jul 2014 Written by Lenie Lectura
ENERGY Secretary Carlos Jericho L. Petilla on Monday said the worsening power-supply problem seen happening in the summer of 2015 prompted him to ask President Aquino to declare a state of emergency.
“I have been meeting with him about this as far back as February and March this year. The last meeting we had was two to three weeks ago. I recommended to the President to invoke Section 71 of the Epira [Electric Power Industry Reform Act],” he said on Monday morning.
The Epira prohibits the government from putting up new power pants. However, Section 71 of the same law states that the President, upon determination of an imminent shortage of supply of electricity, may ask Congress for authority through a joint resolution, to establish additional generating capacity under such terms and conditions as it may approve.
“The emergency power allows the President to come up with additional capacity. He said he is open to it. He is not against it. I just have to make a case out of it,” he said when asked how the President responded to his request.
He made it clear that the proposal for emergency powers has nothing to do with the Luzon brownout caused by Typhoon Glenda last week but rather because of an impending lack of power supply that will hit Luzon come summer next year. “I am uncomfortable with our supply for 2015. Our outlook is we have very thin supply as against demand, so thin that we can go on red alert,” the energy chief said.
A red alert means insufficient power supply.
Based on Luzon supply-demand outlook for 2014-2016 presented by Petilla, a yellow alert would likely be issued around mid-March while April warrants a red alert. A yellow alert was seen issued in May.
Yellow alert means that contingency reserves are below the minimum level set by the regulator but does not necessarily mean power outages or blackouts.
Luzon was placed on yellow alert five times from January to June this year and three times on red alert from May to June this year, the DOE data showed.
“We can live on yellow alert but on red, we cannot,” Petilla said, adding that the maximum demand for capacity next year was seen hitting 9,017 megawatts (MW). “We will have a deficit of 400 [MW] to 500 MW,” he said.
While there are a number of committed power projects that are expected to start commercial operations by 2015, Petilla said these may not be enough to avert a red-alert situation since not all new power plants will be operational at the same time. Moreover, supply is always tight during the summer months. Another reason supply is inadequate next year is due to the shutdown of the Malampaya natural-gas facility from March 15 to April14, 2015.
“This is an admission that by 2015 our supply is not enough. There are projects that we feel may not push through,” Petilla said while adding that the President needs to declare emergency powers as early as “next month” to address the lack of power supply in 2015.
Among the committed power projects for next year include the 87MW Burgos wind scheduled to commence in February; 81MW Caparispisan and 150 MW SLPGC Coal Unit2, both in March; 12MW SJCI Biomass Unit 2 in April; 18 MW IBEC Biomass in May; 10.8 MW Green Biomass and 13.2MW Sabangan HEPin August; 67.5MW Pililia Wind in September; 100 MW Avion in October; and 135 MW Putting Bato Unit2 in November.
If and when the President invokes Section 71 of Epira, Petilla said additional capacity should come from modular generator sets that will run on diesel.
Petilla said the government may tap the Malampaya Fund to finance additional capacity needed by Luzon next year.
He said the cost for every 200 MW of additional capacity roughly translates to P1.5 billion. Luzon is in need of 400MW to 500MW of additional capacity to plug the supply deficiency from March to May next year.
As of August last year, Malamapaya funds amounted to P130 billion.
The Aquino administration, Petilla said, so far used P15 billion of the government’s share from the Malampaya project, which totaled P165 billion since the project commenced in 2001. The previous administration, meanwhile, used up almost P20 billion of this amount, according to Petilla.
The government used the funds for the fuel requirements of the National Power Corp.-Small Power Utilities Group, for the Pantawid Pasada fuel-subsidy program for jeepneys, and for the cost incurred when it took delivery of a Navy ship donated by the US government. source
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