ILP to temper power rate hike – Petilla

By Iris C. Gonzales (The Philippine Star) | Updated September 19, 2014 - 12:00am

MANILA, Philippines - Energy Secretary Carlos Jericho Petilla is looking at an increase of roughly eight to 10 centavos per kilowatt-hour in electricity rates, if the government calls on the Interruptible Load Program (ILP) participants to provide an additional 300 megawatts of power capacity for the summer of 2015.

“I don’t think the incremental effect will ever, ever reach a peso,” Petilla told reporters yesterday on the sidelines of a Senate’s hearing on the Energy department’s budget for 2015.

Thus, the average monthly electricity rate of P11.50 per kwh could increase to roughly P11.58 per kwh, if the government utilizes the ILP for the summer of 2015.

The ILP – wherein private generators could sell their excess capacity to the grid in case of a power shortfall – is among the options that the government may utilize to provide additional capacity for the summer of 2015.

If, on the other hand, the government would tap additional capacity through the lease of bunker-fired modular generator sets as Petilla recommended through Section 71 of the Electric Power Industry Reform Act (EPIRA) of 2001, the rate would be market driven or determined at the Wholesale Electricity Spot Market (WESM), the country’s trading floor for electricity.

Petilla said that while the use of modular gensets may be higher because of fuel costs, the market rates would be blended with other sources of cheaper power and other suppliers of Manila Electric Co. (Meralco), which would distribute the power.

In all, Petilla said, the government would ensure that there would be no power outages this summer.

“We will ensure that there is no brownout with minimal impact to consumers,” Petilla said.

The cost of renting modular gensets, which will provide the additional capacity, is estimated to be around P6 billion, which Petilla said would be shouldered by the government.

The Power Sector Assets and Liabilities Management Corp. (PSALM), the government corporation tasked to handle state-owned power assets, said the government would source the funds from the Malampaya royalties.

PSALM is also looking at either leasing or buying the modular gensets, if the price difference is minimal, PSALM president Emmanuel Ledesma Jr. said.

“We are exploring all options. The funding will come from the Malampaya funds,” Ledesma said.

On President Aquino’s request for emergency powers, Senator Serge Osmena III said the Senate Committee on Energy is keen on granting this.

“We cannot run short in power, so we will definitely give the President special powers,” said Osmena, committee chairman, following a hearing on the Energy department’s budget for 2015 yesterday. source