Power players air issues against open access

business mirror

SUNDAY, 17 JULY 2011 19:25 MAX V. DE LEON / REPORTER

DOMESTIC industries have aired numerous concerns over the impending implementation of the open-access scheme in the power sector, including the absence of the draft contract that will guide transactions between the large consumers and the retail-electricity suppliers (RES).

Emmanuel Go, president of the AGC Flat Glass Philippines Inc., said it is barely five months into the start of the open-access regime on December 26 and the government has not released any draft contract yet for review.

“We would like to see the draft contract now with the RES so we would know our options this early,” Go said at the Federation of Philippine Industries power and energy forum.

He said the industries would like to know if there is a uniform contract checked by the regulator to assure fairness to both RES and consumers.

Also, Go said they want to become aware if the Energy Regulatory Commission (ERC) will come up with “take-or-pay” or “deliver-or-else” provisions.

The open-access scheme allows large consumers with consumption of at least 1 megawatt the option of choosing their power generation and distribution outfits.

RES licenses are given by the ERC to participating generators and distributors.

Go said the ERC should also inform them of mechanisms in accrediting and delisting RES.

And there are also the “what ifs” that the government should clarify, Go said.

For instance, he asked that if there is a grid-capacity or reserve-capacity shortage and it becomes a seller’s market, “are there options or fallbacks for the consumers?”

“How will they allocate limited capacity when there are already contracts committed?” Go asked.

In cases of failure of delivery in terms of quality and quantity, Go asked who should be responsible and how the ERC will determine liability.

Also at the forum, renewable-energy (RE) proponents said that contrary to perceptions, some RE sources have now actually become cheaper than coal.

Engineer Alberto Dalusung III of Preferred Energy Inc. said the price of coal in the world market has now more than doubled to $122 per metric ton, making new coal-fired power plants more expensive.

“So don’t compare RE with old coal [projects]. But with the new ones, for instance, like in the south, new coal is now P7.50/kilowatt-hour,” Dalusing said, noting that hydro and biomass are now cheaper than coal.