Thursday, December 28, 2017

Meralco unit to invest P3.5 B for 2 power projects

By Danessa Rivera (The Philippine Star) | Updated December 28, 2017 - 12:00am

MANILA, Philippines — The power generating unit of Manila Electric Co. (Meralco) has invested P3.5 billion for its two power projects currently under development, company officials said.

Meralco PowerGen Corp. (MGen) president and CEO Rogelio Singson said the company has poured in billions of pesos for the immediate construction of its two power projects in Quezon and Zambales once the Energy Regulatory Commission (ERC) grants their respective power supply agreements (PSA).

So far, MGen has spent P2.8 billion for the 2x300-megawatt (MW) circulating fluidized bed coal-fired power plant in Subic, Zambales under Redondo Peninsula Energy Inc. (RP Energy), MGen senior vice president Angelito Lantin said.

Meanwhile, Lantin said P700 million was already spent for the 2x600-MW ultra supercritical coal-fired power plant under wholly-owned subsidiary Atimonan One Energy Inc. (A1E).

Supply contracts of these two power projects are still hanging with the ERC.

In April 2016, Meralco signed a power supply deal with RP Energy for a 225-MW supply and with A1E for the plant’s full output once completed.

RP Energy is a consortium composed of MGen (47 percent), AboitizPower unit Therma Power Inc. (25 percent) and Taiwan Cogeneration International Corp. (25 percent).

RP Energy has signed a construction contract with local company Azul Torre Construction Inc. and supply contract with Korean firm Doosan Heavy Industries & Construction Co. Ltd. to build the power project.

On the other hand, A1E’s first 600-MW unit is expected to be completed by 2021. It has an estimated project cost of around P135 billion.

For the Atimonan project, MGen has signed a mandate letter for a loan of up to P107.5 billion from eight banks.

It is also tapping Irish firm ESB International, a wholly-owned firm by the Electricity Supply Board, Ireland, to become its operations and management partner for the Atimonan plant.

Under the deal, ESBI will also provide knowledge transfer to MGen in running the Atimonan plant.

MGen said it is also evaluating bids from three potential engineering, procurement and construction contractors and is scouting for prospective partners in the project.

DOE enforces ‘price freeze’ on LPG, kerosene products

Published December 28, 2017, 12:06 AM By Myrna Velasco

As various parts of the country had been pummeled by calamities in recent days, the Department of Energy (DOE) has instituted price freeze on basic energy commodities, primarily for liquefied petroleum gas (LPG) and kerosene products.
The department said this is in line with the declaration of a state of calamity in many areas in Mindanao that had been hit by tropical storm “Vinta.” Prior to that, the Visayas region also suffered from the wrath of tropical storm “Urduja.”
As enforced by the department, “the price freeze application is for 15 days, commencing one day after the declaration.” The announcement was made on December 26.
The coverage of the price freeze will be the LPG products used for household cooking, typically the 11-kilogram cylinder and those tanks of smaller sizes.
And for kerosene, the department is expecting ‘no price movement’ when the oil companies will adjust their prices next — their Tuesday routine on a weekly basis.
To properly carry out this mandate, the department noted that its Oil Industry Management Bureau (OIMB) and its field offices are now coordinating with relevant industry players, so they can be properly apprised of this order.
The price freeze on basic commodities, in times of calamities, is prescribed under Republic Act 7581, as amended by RA 10623, or the “Price Act.”
One important parameter that must be monitored in this order would be the ‘no increase’ prescription for LPG products as their costs only move on a monthly basis.
Apart from sustaining the price levels of certain commodities, the DOE has likewise been collaborating with all players in the industry to normalize fuel supply and bring back electricity service in storm-hit areas.
Required efforts though would be massive as two core regions of the country have been walloped by successive storms in just a stretch of a week.
Energy Secretary Alfonso G. Cusi indicated that “we are doing all we can to bring back to normalcy the energy situation and secure fuel and power supplies in the typhoon-stricken areas.”
He gave word that his department will take the lead in “monitoring the situation in typhoon-affected areas even during the holidays to ensure that people have ample and secure energy supply.”

Wednesday, December 27, 2017

ERC asked to probe ‘midnight dispatch’ of solar plants

Published December 26, 2017, 10:00 PM By Myrna M. Velasco

The solar plants logging capacity dispatch at “witching hours” or when the sun is apparently not up at midnight, is a serious matter that the Energy Regulatory Commission (ERC) has been asked to seriously investigate because these may have been adding up to the cost subsidies being passed on to all consumers via the feed-in-tariff allowance (FIT-All) line item in the electric bills.
In a memorandum lodged to the ERC by Manila Electric Company (Meralco), an intervenor in the 2017 Feed-in-Tariff Allowance (FIT-All) application of the National Transmission Corporation (TransCo), it was stipulated that “midnight generation” for solar power plants have been recorded at least three times in August, September and October this year.
The most puzzling of these have been the solar capacity dispatch at 1:00 a.m. to 4:00 a.m. when there had not even a hue of sun rising – and it was noted that in at least one incident, there was also a typhoon pounding the site of one of the solar plants with registered capacity dispatch.
“It is apparent that solar PV (photovoltaic) generation even during night-time intervals is being reported repeatedly over time,” the utility firm said.
On that premise, Meralco pleaded that “all meter data for energy purportedly delivered by RE (renewable energy) plants must be counter-checked/verified for the purpose of ensuring their accuracy before the same are considered/included in the calculation of amount of FIT-All that would be approved under the instant application as well as the amount of FIT that will be paid to RE developers.”
Nevertheless, according to the market operator of the Wholesale Electricity Spot Market (WESM), the reported evening generation of solar facilities had been based on forecasts and not the actual metered quantity, being the basis of their FIT payments.
Aside from the evening generation of solar facilities, Meralco similarly questioned the “differing figures” of the ERC and the Department of Energy (DoE) on the capacity installations qualifying for the FIT subsidy.
In its filing with the regulatory body, Meralco cited several biomass and run-of-river hydropower plants with higher installed capacities being factored in into the TransCo’s FIT-All petition.
These include the biomass facilities of Pangea Green Energy Philippines, Inc., Montalban Methane Power Corporation, Bicol Biomass Energy Corporation and Green Earth Enersource Corporation; and the Sabangan and Tudaya hydro facilities of Hedcor, Inc.
“The difference in capacity in said lists, in particular, an increase in the total amount of more than 10MW, is significant as it will contribute to an increase in the FIT-All rate,” Meralco stressed. It added that “the projected RE generation should be determined by using only the approved installed capacity.”
ERC Chairperson Agnes T. Devanadera said they will look into the matter when they will finally evaluate TransCo’s FIT-All application.
As prescribed by rules, “the meter data is the basis for payment of FIT rates to FIT-eligible RE developers,” and it is worth noting that “RE developers are paid per kWh generated as reflected in their respective meters.”
Meralco thus emphasized that “the accuracy of meter data is crucial when it comes to determining the appropriate FIT to which RE developers are entitled to.”

ERC not inclined at drafting new guidelines for RCOA

Published December 25, 2017, 10:00 PM By Myrna M. Velasco

The lingering interruption of ‘business flows’ and customer switching in the retail competition and open access (RCOA) policy of the restructured electricity sector will likely persist as the Energy Regulatory Commission (ERC) stated that it is not inclined at drafting any new guidelines that shall support the newly-issued RCOA Circular of the Department of Energy.
The DOE-issued edict in November targeted to lower the threshold of RCOA to 750 kilowatts and then to the aggregation level of 500kW; and had also set the enforcement of the policy on voluntary basis.
The DOE Circular has been intended to ‘cure’ the questioned RCOA policies in a pending case at the Supreme Court, but for the policy imposition to really get into implementation, it has to be underpinned by guidelines that must be issued by the ERC.
Nevertheless, ERC Chairperson Agnes T. Devanadera made it clear that the regulatory body is more predisposed to just wait for the final verdict of the Supreme Court as to the fate of the RCOA policy.
She told reporters that they still have their hands tied as to the next step relating to RCOA in spite of the new DOE Circular, so their prudent recourse is to just hold their horses until the issuance of a ruling from the high court.
“We can’t draft the (RCOA) guidelines because we would also need to anchor our next steps with what the SC will rule upon,” she stressed.
The players in the power industry are hoping that the ‘unwanted break’ in the RCOA sphere of the business could already be resolved with the recently-issued DOE circular, but it appears now that such had just been an exercise in futility without any supporting guidelines from the ERC.
The ERC’s task on RCOA enforcement is critically important, because it is the one issuing licenses to retail electricity suppliers (RES) and had also been laying down the rules for competitive play in the entire sector.
As of the latest count of the Philippine Electricity Market Corporation (PEMC), the central registration body for RCOA, there are now 1,049 participants in the retail electricity market, featuring multiplicity of buyers and sellers.