National Grid cleared to use backup power

Business World Online

Posted on 10:10 PM, October 12, 2010

IN A bid to address the nagging power shortage in Mindanao, the Department of Energy (DoE) has directed the National Grid Corporation of the Philippines (NGCP) to use more often the two 100-megawatt power barges of Aboitiz-led Therma Marine, Inc.

Energy Secretary Jose Rene D. Almendras signed Department Circular 10-0011 yesterday, ordering NGCP, the National Power Corporation and the National Electrification Administration to "fully utilize all available capacities for energy purposes, and provide all necessary assistance to electric cooperatives."

From the summer months until the middle of September, NGCP used the power barges to augment Mindanao’s power supply, which yesterday posted a surprising 74 MW reserve from the usual deficit that in recent weeks could run up to more than 100 MW.

Electricity cooperatives and consumer groups, however, complained of resulting high electricity prices and questioned the legality of NGCP’s continued use of the power barges despite the cheaper hydroelectric plants coming on line after summer.

Parts of Mindanao have been experiencing hours of outages in the past month due to recurring power deficiency.

"In the performance of its obligations, considering its authority to maximize the dispatch of available capacities, NGCP is hereby directed to use any and all available capacity to maintain load-generation balance to meet the demand for energy at any given time," the circular read.

"The NGCP shall immediately comply with the directives set out in this circular and shall continue to use the available capacities to meet the demand for energy in the Mindanao region for a period of 45 days from the effectivity of this circular. After the expiration of such period and unless otherwise directed by the DoE, the NGCP shall continue to maintain load-generation balance in the Mindanao region," the circular continued.

Cynthia D. Perez-Alabanza, NGCP spokesperson, said in an interview that the company is still seeking the declaration of the Energy Regulatory Commission (ERC) of an abnormal situation in Mindanao. "Right now, we have asked for a clarification from the ERC to determine if the power supply deficiency in Mindanao is an abnormal situation so we would be able to dispatch our contracted capacity for ancillary power. We will comply with the DoE as long as the ERC allows us because our business is highly regulated," Ms. Alabanza said.

NGCP has an ancillary services provider agreement with Therma Marine, the operator of the barges, for 50 MW from each floating plant as backup power.

The remaining capacity is available for bilateral contracts with electricity cooperatives.

Ms. Alabanza said NGCP will pass on to consumers the cost of using more expensive electricity from the diesel-fired power barges.

Last week, the ERC approved a lower ancillary rate for the power barges. The ERC lowered the rate to P7.40 per kilowatt hour (kWh) from the P7.93 per kWh it provisionally approved in March. Therma Marine, however, has appealed the ruling. --ENJD