Iloilo faces power shortage anew

Business World Online

Posted on 09:58 PM, November 22, 2010

ILOILO CITY -- Power shortage could recur in this city early next year unless Panay Electric Co. (PECO), Inc. gets additional supply to meet rising demand.

PECO, which is the sole power distribution utility in Iloilo, has signed a contract to purchase only 65 megawatts (MW) from the new coal-fired plant built by Panay Energy Development Corp. and reduced its contracted supply from Panay Power Corp. to just 15 MW from the previous 72 MW.

Hence, PECO has contracted a total of only 80 MW from Panay Energy and Panay Power, both owned by Metrobank’s Global Business Power Corp. The contract is still pending with the Energy Regulatory Commission (ERC) which recently wrapped up its hearings on the new deal.

At the height of summer last May, PECO’s peak load reached 78-80 MW.

Gil A. Altamira, Global Business Power commercial operations manager, said PECO’s supply contract is indeed conservative. While 80 MW should be enough to address current demand, it may not be enough for future requirements, he warned.

"Unless PECO contracts more power from available sources, we are looking at another round of power shortage by next year (in the city)," Mr. Altamira said.

He said PECO might exceed the 80 MW peak load in summer next year, as new establishments and businesses use up the new capacity from the coal-fired power plant.

But Randy S. Pastolero, PECO vice-president for operations, said that aside from the contract with Panay Energy, the company will also enter into a 10-MW contract with Lopez-owned Green Core Geothermal, Inc. next year to augment its power supply.

PECO now has a contract with Green Core, but it hardly taps this source since electricity under the agreement is available only during non-peak hours, usually late in the evening to early morning of the following day. But Iloilo City’s peak period is 10 a.m.-7 p.m. when most commercial establishments, particularly malls, operate.

Mr. Pastolero said the new contract with Green Core could be enough to cover additional demand next year.

Mr. Altamira said he expects the electricity rates of PECO customers to decrease once the distributor starts getting its requirement from Panay Energy. Since Panay Energy operates within PECO’s system, consumers will no longer pay for transmission cost which ranges from P1.20-1.40 per kilowatthour. "Naturally, PECO consumers will enjoy a bigger price difference from those in cooperatives [distributing to other areas]," he said.

The new Panay Energy coal plant has been synchronized to the Cebu-Negros-Panay grid for tests and has been supplying electricity to PECO, thus, reducing brownouts, except when the plant shuts down for minor adjustments. Plants undergoing load tests are allowed to supply power to utilities not only to try the plant’s reliability and compatibility with the grid, but also to ease the power shortage. -- F. A. L. Angelo