Business World Online
Posted on August 10, 2014 11:26:00 PM
IN A BID to address the projected supply shortfall next year, the Department of Energy (DoE) has formally asked for the Joint Congressional Power Commission’s (JCPC) position on allowing the government to contract additional power generation capacities.
Energy Secretary Carlos Jericho L. Petilla, in a letter dated Aug. 1, said the government is exploring measures to mitigate the impact of an expected tight supply situation, which could put the Luzon grid on yellow or red alert in April to May next year.
“One of the proposed measures is the contracting of additional generation capacities,” the letter addressed to JCPC Executive Director Oscar M. Ala read.
Mr. Petilla said the department is looking at the possibility of tapping the Power Sector Assets and Liabilities Management Corp. (PSALM) to implement the proposal.
“[W]e respectfully seek the Honorable Commission’s position on the proposal for PSALM to contract the additional generation capacities within the framework of Electric Power Industry Reform Act of 2001 (EPIRA) or the Republic Act No. 9136,” the letter further stated.
The JCPC -- composed of an executive director and 14 members from the two chambers of Congress -- is mandated to monitor and ensure the proper implementation of the EPIRA.
Mr. Petilla noted that the request for JCPC’s comment was in line with President Benigno S. C. Aquino III’s instructions to the department during his State of the Nation Address.
Mr. Aquino had directed the Energy department to coordinate with JCPC, Energy Regulatory Commission and other stakeholders to find a solution to the country’s power problem.
In a separate interview Thursday night, Mr. Petilla said Mr. Aquino has yet to decide on his recommendation to invoke the Section 71 of the EPIRA or the power crisis provision.
“Upon the determination by the President of the Philippines of an imminent shortage of the supply of electricity, Congress may authorize, through a joint resolution, the establishment of additional generating capacity under such terms and conditions as it may approve,” Section 71 states.
Mr. Petilla said the department will first ask for the JCPC’s comment on the possibility of leasing power generating facilities through PSALM.
“The government will not own the plant. We are looking at leasing existing capacities,” he said.
He acknowledged that this would allow PSALM to enter into leasing arrangements with private companies like First Gen Corp.
Sought for comment, First Gen President Francis Giles B. Puno said the company is exploring the possibility of providing another 100-megawatt (MW) plant next year on top of its committed 100-MW Avion natural gas plant in Batangas.
“What we’re committed to is the first 100 MW. We have approached our suppliers to see what they can do to accelerate another 100 MW,” Mr. Puno said when asked if the company is open to leasing arrangements with PSALM.“We don’t have any commitment at this stage. We are still exploring with our supplier,” he added.
While he noted that the Avion project is on-track for its commercial operations in 2015, another 100-MW may not be operational in time for summer.
“It’s very tight to be completed summer by 2015. Its very difficult unless we use a different kind of technology,” Mr. Puno said.
The Luzon grid is expected to have a power supply shortfall of around 200 MW in May next year. Hence, the government is exploring options as early as this year to avoid power interruptions.
Last month, Manila Electric Co. (Meralco) also suggested several measures to address the anticipated supply problem.
Meralco President Oscar S. Reyes had said among the things that could be done is a careful and prudent scheduling of power plants’ maintenance shutdowns.
This, according to Mr. Reyes, would prevent the overlapping maintenance outages of major power plants that could put the grid on “red alert.”
Meralco also recommended the “improvement of plant reliability and availability before the second quarter of 2015” to allow the full utilization of power plants that would eventually contribute to a stable power supply to the grid.
He also urged the National Grid Corporation of the Philippines to fast-track the completion of its transmission projects to support the fast growing energy demand. -- Claire-Ann Marie C. Feliciano source
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