Electricity supply deal to boost Luzon reserves

Business World Online
Posted on March 06, 2014 10:26:35 PM 

A UNIT of Aboitiz Power Corp. (AboitizPower) and the National Grid Corporation of the Philippines (NGCP) have sought regulatory approval for their supply deal that will augment the Luzon grid’s power reserves, the latter said in a statement yesterday. 
“The country’s transmission system operator, NGCP, and SN Aboitiz Power-Benguet, Inc. (SNAP-BI) filed with the Energy Regulatory Commission (ERC) a joint application for the approval of their Ancillary Services Procurement Agreement,” the statement read. 
NGCP is mandated by law to determine, acquire and dispatch ancillary services (AS) -- or reserve power supply -- to the grid whenever needed. 
“After a series of technical testing and evaluation, NGCP concluded that Binga hydroelectric power plant, operated by SNAP-BI, is a capable AS provider,” NGCP said. 
The said plant -- located in the municipality of Itogon in Benguet -- has a capacity of 125.8 megawatts (MW). 
CRUCIAL COMPONENT 
NGCP explained that AS, as provided by the Electric Power Industry Reform Act of 2001, are those services necessary to support the transmission of capacities in Luzon, the Visayas and Mindanao grids. 
“AS are needed to regulate the frequency of transmitted electricity to avoid fluctuations and to help the system adapt to sudden loss of power supply to prevent the occurrence of massive blackouts,” the grid operator said. 
“AS also provides assistance to back up generating plants that temporarily address the lack of supply in the system, thereby, normalizing the system during a power loss.” 
NGCP’s Web site showed that the Luzon grid was estimated yesterday with reserves of 1,109 MW, with system capacity of 8,337 MW against a system peak of 7,228 MW. 
NGCP is private firm that operates, maintains and develops the country’s transmission network since 2009. It acquired the 25-year concession of state-owned National Transmission Corp. in an auction conducted by the Power Sector Assets and Liabilities Management Corp. in 2008. 
The firm is in charge of the transmission of high-voltage electricity through an interconnected system of transmission lines, towers, substations, and related facilities. 
SNAP-BI, on the other hand, is part of the SNAP Group -- which is a joint venture between SN Power of Norway and AboitizPower. 
The company in October last year completed the rehabilitation of the Binga power plant which was intended to increase the capacity of the four units from 25 MW each to 31.45 MW each. From 100 MW, the plant is now operating at 125.8 MW. 
Last September, SNAP-BI secured a certificate of compliance from the ERC for the four rehabilitated units of the Binga power plant which is a requirement before a plant proceeds with commercial operations. 
Besides the Binga plant, SNAP Group also owns and operates the 105-MW hydroelectric power plant in the municipality of Bokod also in Benguet; and the 360-MW Magat hydro plant in Ramon, Isabela.  
AboitizPower is the listed power generation and distribution arm of Aboitiz Group. Its net income dropped 22.26% to P14.6 billion as of September last year from P18.78 billion in the same nine months in 2012. 
In the same comparative periods, revenues decreased by 4.15% to P45.06 billion from P47.01 billion, while expenses went down by 8.24% to P29.07 billion from P31.68 billion. 
Shares of the company gained 85 centavos or 2.05% to close at P42.25 apiece yesterday from P41.40 each on Wednesday. -- Claire-Ann Marie C. Feliciano source