Business Companies by Lenie Lectura - Oct 26, 2014
THE Department of Energy (DOE) never runs out of problems. On Sunday Energy Secretary Carlos Jericho L. Petilla bared that a power producer expected to contribute 100 megawatts (MW) of additional capacity next year is now encountering a road right-of-way (ROW) problem.
“Millennium Energy is having problems right now. We can’t afford to have problems like this,” said Petilla in an interview.
In particular, Millennium Energy has a problem with the Fish Port Development Authority (FPDA) because Millennium Energy’s power facility in Navotas is situated in a property under the FPDA.
The power firm was supposed to produce 100 MW of additional capacity by upgrading its Navotas power plant. The rehabilitation is targeted to be completed by March 2015.
However, the planned rehabilitation has now been put on hold because FDPA, which owns the property where the power facility is located, has yet to give its green light.
“All our deliveries and activities are now put on hold order. The critical deliveries are due next week. Millennium is very concerned that if FPDA will disallow these, our timetable will be delayed,” Millennium Energy told the energy department.
Millennium is sub-leasing the property from Petron who has given a contract of lease. However, FPDA has not given permission to start the rehabilitation project because this would still require a Board approval.
Petilla said his office would intervene and will try to persuade the FPDA to allow Millennium Energy to proceed with the rehabilitation. “March 1 is the deadline. For every week of delay, we face another problem,” Petilla said.
Petilla said problems such as this can be easily resolved if only President Aquino is granted special powers to deal with the power crisis anticipated in Luzon next year.
“The authority, if granted by Congress, does not only deal with acquiring or leasing modular gen sets. It goes beyond that,” the energy chief said.
Among others, Petilla said, the special powers could do away with the permitting process, avoid temporary restraining orders, and fast track the necessary approvals from various government agencies.
“This is what I have been telling all along. If there is such a law that will make it easier to solve our power problems then these problems would not have occurred in the first place. We no longer can not afford delays anymore,” Petilla said.
Congress is no longer in a hurry to issue a joint resolution that will, among others, grant the President an authority to negotiate contracts for the acquisition of additional generation capacity either via lease or purchase.
The Electric Power Industry Reform Act prohibits the government from putting up power plants. However, Section 71 of the said law states that the President, upon determination of an imminent shortage of supply of electricity, may ask for Congress for authority, through a joint resolution, to establish additional generating capacity under such terms and conditions.
The Luzon grid is in need of 678 MW to cover for the 647-MW contingency reserve and 31 MW of deficit anticipated. The DOE has received firm commitments from industry stakeholders an additional 424 MW of capacity but this was already factored into its computation. Petilla warned that if nothing is done then Luzon is facing two to three hours of power outage for 22 days between March and May.
“This is a conservative estimate of a worst-case scenario. There will be brownouts during weekdays at daytime. However, it could go worse if unscheduled shutdown of power plants occur,” he said.
The DOE was already able to persuade power producers to move the maintenance shutdown of their power plants that were originally scheduled in March and April to June and July.
“But I am not in control of the power plants that will conk out during summer. If that happens, then that’s a big problem.
But as far as scheduled maintenance is concerned they already agreed to move it in June and July where demand is low and hopefully, by that time, the expected additional capacity in summer would have already come in,” Petilla said. source
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