By Danessa Rivera (The Philippine Star) | Updated December 28, 2017 - 12:00am
http://www.philstar.com/business/2017/12/28/1772301/meralco-unit-invest-p3.5-b-2-power-projects
MANILA, Philippines — The power generating unit of Manila Electric Co. (Meralco) has invested P3.5 billion for its two power projects currently under development, company officials said.
Meralco PowerGen Corp. (MGen) president and CEO Rogelio Singson said the company has poured in billions of pesos for the immediate construction of its two power projects in Quezon and Zambales once the Energy Regulatory Commission (ERC) grants their respective power supply agreements (PSA).
So far, MGen has spent P2.8 billion for the 2x300-megawatt (MW) circulating fluidized bed coal-fired power plant in Subic, Zambales under Redondo Peninsula Energy Inc. (RP Energy), MGen senior vice president Angelito Lantin said.
Meanwhile, Lantin said P700 million was already spent for the 2x600-MW ultra supercritical coal-fired power plant under wholly-owned subsidiary Atimonan One Energy Inc. (A1E).
Supply contracts of these two power projects are still hanging with the ERC.
In April 2016, Meralco signed a power supply deal with RP Energy for a 225-MW supply and with A1E for the plant’s full output once completed.
RP Energy is a consortium composed of MGen (47 percent), AboitizPower unit Therma Power Inc. (25 percent) and Taiwan Cogeneration International Corp. (25 percent).
RP Energy has signed a construction contract with local company Azul Torre Construction Inc. and supply contract with Korean firm Doosan Heavy Industries & Construction Co. Ltd. to build the power project.
On the other hand, A1E’s first 600-MW unit is expected to be completed by 2021. It has an estimated project cost of around P135 billion.
For the Atimonan project, MGen has signed a mandate letter for a loan of up to P107.5 billion from eight banks.
It is also tapping Irish firm ESB International, a wholly-owned firm by the Electricity Supply Board, Ireland, to become its operations and management partner for the Atimonan plant.
Under the deal, ESBI will also provide knowledge transfer to MGen in running the Atimonan plant.
MGen said it is also evaluating bids from three potential engineering, procurement and construction contractors and is scouting for prospective partners in the project.
Thursday, December 28, 2017
DOE enforces ‘price freeze’ on LPG, kerosene products
Published December 28, 2017, 12:06
AM By Myrna Velasco
As various parts of the country had
been pummeled by calamities in recent days, the Department of Energy (DOE) has
instituted price freeze on basic energy commodities, primarily for liquefied
petroleum gas (LPG) and kerosene products.
The department said this is in line
with the declaration of a state of calamity in many areas in Mindanao that had
been hit by tropical storm “Vinta.” Prior to that, the Visayas region also
suffered from the wrath of tropical storm “Urduja.”
As enforced by the department, “the
price freeze application is for 15 days, commencing one day after the
declaration.” The announcement was made on December 26.
The coverage of the price freeze
will be the LPG products used for household cooking, typically the 11-kilogram
cylinder and those tanks of smaller sizes.
And for kerosene, the department is
expecting ‘no price movement’ when the oil companies will adjust their prices
next — their Tuesday routine on a weekly basis.
To properly carry out this mandate,
the department noted that its Oil Industry Management Bureau (OIMB) and its
field offices are now coordinating with relevant industry players, so they can
be properly apprised of this order.
The price freeze on basic
commodities, in times of calamities, is prescribed under Republic Act 7581, as
amended by RA 10623, or the “Price Act.”
One important parameter that must be
monitored in this order would be the ‘no increase’ prescription for LPG
products as their costs only move on a monthly basis.
Apart from sustaining the price
levels of certain commodities, the DOE has likewise been collaborating with all
players in the industry to normalize fuel supply and bring back electricity
service in storm-hit areas.
Required efforts though would be
massive as two core regions of the country have been walloped by successive
storms in just a stretch of a week.
Energy Secretary Alfonso G. Cusi
indicated that “we are doing all we can to bring back to normalcy the energy
situation and secure fuel and power supplies in the typhoon-stricken areas.”
He gave word that his department
will take the lead in “monitoring the situation in typhoon-affected areas even
during the holidays to ensure that people have ample and secure energy supply.”
Wednesday, December 27, 2017
ERC asked to probe ‘midnight dispatch’ of solar plants
Published December 26, 2017, 10:00
PM By Myrna M. Velasco
The solar plants logging capacity
dispatch at “witching hours” or when the sun is apparently not up at midnight,
is a serious matter that the Energy Regulatory Commission (ERC) has been asked
to seriously investigate because these may have been adding up to the cost
subsidies being passed on to all consumers via the feed-in-tariff allowance
(FIT-All) line item in the electric bills.
In a memorandum lodged to the ERC by
Manila Electric Company (Meralco), an intervenor in the 2017 Feed-in-Tariff
Allowance (FIT-All) application of the National Transmission Corporation
(TransCo), it was stipulated that “midnight generation” for solar power plants
have been recorded at least three times in August, September and October this
year.
The most puzzling of these have been
the solar capacity dispatch at 1:00 a.m. to 4:00 a.m. when there had not even a
hue of sun rising – and it was noted that in at least one incident, there was
also a typhoon pounding the site of one of the solar plants with registered
capacity dispatch.
“It is apparent that solar PV
(photovoltaic) generation even during night-time intervals is being reported
repeatedly over time,” the utility firm said.
On that premise, Meralco pleaded
that “all meter data for energy purportedly delivered by RE (renewable energy)
plants must be counter-checked/verified for the purpose of ensuring their
accuracy before the same are considered/included in the calculation of amount
of FIT-All that would be approved under the instant application as well as the
amount of FIT that will be paid to RE developers.”
Nevertheless, according to the
market operator of the Wholesale Electricity Spot Market (WESM), the reported
evening generation of solar facilities had been based on forecasts and not the
actual metered quantity, being the basis of their FIT payments.
Aside from the evening generation of
solar facilities, Meralco similarly questioned the “differing figures” of the
ERC and the Department of Energy (DoE) on the capacity installations qualifying
for the FIT subsidy.
In its filing with the regulatory
body, Meralco cited several biomass and run-of-river hydropower plants with
higher installed capacities being factored in into the TransCo’s FIT-All
petition.
These include the biomass facilities
of Pangea Green Energy Philippines, Inc., Montalban Methane Power Corporation,
Bicol Biomass Energy Corporation and Green Earth Enersource Corporation; and
the Sabangan and Tudaya hydro facilities of Hedcor, Inc.
“The difference in capacity in said
lists, in particular, an increase in the total amount of more than 10MW, is
significant as it will contribute to an increase in the FIT-All rate,” Meralco
stressed. It added that “the projected RE generation should be determined by
using only the approved installed capacity.”
ERC Chairperson Agnes T. Devanadera
said they will look into the matter when they will finally evaluate TransCo’s
FIT-All application.
As prescribed by rules, “the meter
data is the basis for payment of FIT rates to FIT-eligible RE developers,” and
it is worth noting that “RE developers are paid per kWh generated as reflected
in their respective meters.”
Meralco thus emphasized that “the
accuracy of meter data is crucial when it comes to determining the appropriate
FIT to which RE developers are entitled to.”
ERC not inclined at drafting new guidelines for RCOA
Published December 25, 2017, 10:00
PM By Myrna M. Velasco
The lingering interruption of
‘business flows’ and customer switching in the retail competition and open
access (RCOA) policy of the restructured electricity sector will likely persist
as the Energy Regulatory Commission (ERC) stated that it is not inclined at
drafting any new guidelines that shall support the newly-issued RCOA Circular
of the Department of Energy.
The DOE-issued edict in November
targeted to lower the threshold of RCOA to 750 kilowatts and then to the
aggregation level of 500kW; and had also set the enforcement of the policy on
voluntary basis.
The DOE Circular has been intended
to ‘cure’ the questioned RCOA policies in a pending case at the Supreme Court,
but for the policy imposition to really get into implementation, it has to be
underpinned by guidelines that must be issued by the ERC.
Nevertheless, ERC Chairperson Agnes
T. Devanadera made it clear that the regulatory body is more predisposed to
just wait for the final verdict of the Supreme Court as to the fate of the RCOA
policy.
She told reporters that they still
have their hands tied as to the next step relating to RCOA in spite of the new
DOE Circular, so their prudent recourse is to just hold their horses until the
issuance of a ruling from the high court.
“We can’t draft the (RCOA)
guidelines because we would also need to anchor our next steps with what the SC
will rule upon,” she stressed.
The players in the power industry
are hoping that the ‘unwanted break’ in the RCOA sphere of the business could
already be resolved with the recently-issued DOE circular, but it appears now
that such had just been an exercise in futility without any supporting
guidelines from the ERC.
The ERC’s task on RCOA enforcement
is critically important, because it is the one issuing licenses to retail
electricity suppliers (RES) and had also been laying down the rules for
competitive play in the entire sector.
As of the latest count of the
Philippine Electricity Market Corporation (PEMC), the central registration body
for RCOA, there are now 1,049 participants in the retail electricity market,
featuring multiplicity of buyers and sellers.
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