Mining woes

Business World Online

Posted on 09:53 PM, October 06, 2010

Downsouth -- By Hernani De Leon

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National media reports on Mindanao’s power situation are alarming -- as if the situation has returned to April and May when populated centers suffered up to eight hours of daily rotating power cuts. On the contrary, the new brownout schedule has not severely affected most business operations, except perhaps in Zamboanga City. Many businesses have learned to cope and adjusted operations to minimize losses.

This city’s downtown, however, has been generally spared from hourlong brownouts thanks mainly to Davao Light and Power Co.’s backup facilities. There were several less-than-one-hour outages last month, including one yesterday at the city’s central business district, but traders have adjusted to this aberration.

The Web site of the National Grid Corporation of the Philippines as of Oct. 5 showed Mindanao with a deficiency of only 46 megawatts (MW). This is a "major, major" improvement against the 327-MW deficiency in the same day, in the Visayas. Yet, the reports sound like Mindanao is again under a power emergency.

Some cities, however, are not benefiting from improving power supply. There is a two- to three-hour daily scheduled outage in Cagayan de Oro City and similar rotating brownouts in the cities of Zamboanga and General Santos.

Some groups in Northern Mindanao have claimed that the current outage is intentional and is meant to provide business to Therma Marine, Inc., the Aboitiz subsidiary that operates 200-MW power barges. Therma Marine was previously commissioned to boost Mindanao’s power generation but it temporary ceased to do so last month.

It was assumed then that since water reservoirs are full, hydropower plants could now provide 55% of the island’s demand or close to 600 MW at any given time. The assumption, however, did not cover maintenance shutdowns and repairs from unexpected plant breakdowns.

The problem with Therma Marine is that by supplying power to the Mindanao grid, electricity bills have to rise by about P1.20 to P1.50 per kilowatt-hour. For those who can afford, the increase is far better than a two-hour daily brownout.

By the way, Davao Region’s power outlook is looking up since two plants planned for construction in two years with a combined capacity of 350 to 400 MW are in southern Mindanao. Factor in the small hydropower facilities being constructed by Hedcor, Inc. and supply to this city will soon meet demand estimated at 350 megawatts, about a third of the island’s requirement.

In the past, about 90% of power supplied to this city comes from power plants operating in Northern Mindanao.