Tag Archives: Dept.of Energy

Mindanao power market set for commercial start

BusinessWorld Online
November 7, 2013

MINDANAO’S perennial power woes are expected to soon be alleviated with an electricity trading platform set to start commercial operations before the end of the month.

A final regulatory hurdle involving an offer cap for the Interim Mindanao Electricity Market (IMEM) has been resolved, regulators noted in resolution published yesterday.

“[A]n offer cap… is hereby set at P32,000 per megawatt hour (equivalent to P32/kWh) and shall remain effective unless otherwise amended or revoked…,” the Department of Energy (DoE), Energy Regulatory Commission (ERC) and Philippine Electricity Market Corp. (PEMC) said in the resolution, which was signed last Oct. 7.

Mylene C. Capongcol, director of the DoE’s Electric Power Industry Management Bureau, said that with the matter settled, “commercial operations of the IMEM will push through on Nov. 26.”

The objective, she explained, is to allow all available capacities to be offered in the market at a certain price.

“We expect that the distribution utilities (DUs) in Mindanao will utilize the IMEM so that we can address the power supply problems. These DUs will source the shortfall of their power needs from the market,” Ms. Capongcol said.

“So once the DUs already have enough supply for their customers, there will no longer be rotating brownouts in Mindanao.”

Ms. Capongcol stressed that “the cost of electricity that will be offered will not go beyond the price cap. We hope it will even be lower.”

The joint resolution said the DoE, ERC and PEMC would review the cap “three months from the start of the full commercial operations of the IMEM and as may be often as necessary to determine whether an adjustment is necessary under prevailing circumstances.”

PEMC President Melinda L. Ocampo separately confirmed that the offer cap’s approval “paves the way for the full commercial operations of IMEM.” Commercial operations, she noted yesterday, “will mark the start of the trading of electricity in the market.”

Initial IMEM operations last Sept. 26 aimed to familiarize participants with the daily trading operations.

The platform, seen luring power generators that previously refused to sell excess capacity because payments were not guaranteed, is expected to provide for an additional 200 megawatts of power.

Gov’t to keep Mindanao hydroelectric power plants

By Amy R. Remo
Philippine Daily Inquirer
First Posted 08/18/2010

THE DEPARTMENT of Energy will no longer privatize or offer to investors the 955-megawatt Agus and Pulangi hydropower plants in Mindanao as these are expected to help stabilize supply and electricity prices on the island.

“I’m not eager to sell [the hydro facilities] because I think part of the solution to the Mindanao situation is the appropriate use of those [plants] not just for supply but in the pricing equation,” said Energy Secretary Jose Rene Almendras.

The two facilities are critical power assets as these currently provide more than half of Mindanao’s electricity supply.

At the sidelines of the mid-year economic briefing Wednesday, Almendras said that he has informed the state-run Power Sector Assets and Liabilities Management Corp. (PSALM) that “we would like to recommend that we do not sell Agus and Pulangi.”

The energy chief acknowledged that the DOE had to seek a confirmation or a go-ahead from the Joint Congressional Power Commission (JCPC) to allow it to keep the facilities.

Under the Electric Power Industry Reform Act (Epira), the government is mandated to privatize all its power generation assets, including the Agus and Pulangi facilities.

“So hopefully, Congress will [allow] us. I will have to explain to Congress why we don’t want to [privatize the facilities],” Almendras said.

“[The Agus and Pulangi are] not yet for sale. We don’t want to sell it yet, or maybe how long that will be, it will depend on how soon we can achieve true pricing [in Mindanao] and make appropriate adjustments to encourage investments,” Almendras pointed out.

Since it relies heavily on hydropower, Mindanao was the hardest hit by the prolonged drought experienced earlier this year, during which the island suffered power outages lasting up to 12 hours daily.

It was only in July and August this year, with the onset of the rainy season, did the power supply situation in Mindanao began to stabilize.

Last May, former Energy Secretary Jose C. Ibazeta stressed the need to sell all government-owned power-generation assets despite the opposition raised by a number of civil and nongovernment groups.

PSALM was even planning to start preparations for the planned privatization of the hydroelectric facilities by the end of the year. A number of prospective investors had expressed interest in the Agus and Pulangi hydropower plants, including Norway-based Statkraft Norfund Power Invest AS (SN Power).

The Agus hydropower facilities have seven units that can generate a total of 700 MW. Agus 6, the first of the seven units, was constructed in 1953 while the newest of the power plants was Agus 1, which began operating in 1992.

The Pulangi hydropower plant in Bukidnon can generate 255 MW. It began operating commercially in 1985.