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Power shortage grips Mindanao island anew

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BusinessWeek Mindanao
Post Published: 27 February 2012

POWER shortage continued to stall businesses in several provinces in Mindanao as the National Grid Corporation of the Philippines (NGCP) started imposing load curtailment in 33 electric cooperatives as power supply has fallen due to alleged generation deficiency.

NGCP, the private sector operator of the state-owned transmission grid, is projecting an average shortage of 179 megawatts (MW) for the island next month to as high as 345 MW in April.

“The curtailment is Mindanao-wide. I don’t know how many cooperatives there are but everyone is affected. (Power) reserves are in the negative. We’ve been on Red Alert for several weeks now,” said NGCP spokesperson Cynthia Perez Alabanza.

Severely affected are the provinces of Maguindanao, North Cotabato, South Cotabato, and most parts of Sarangani, which are now suffering power outages lasting one to six hours.

Also affected by the load curtailment are General Santos, Cotabato, Iligan, Surigao, Kidapawan, and Zamboang
NGCP corporate communications officer for Mindanao Milfrance Capulong said only Davao and Cagayan de Oro cities have so far not been affected by the power outages because of the sufficient resources of local power firms.

Davao City has a standby power plant, which helps avert blackouts at this time.

“We impose load curtailment to protect the stability of the (Mindanao) grid. Let’s say that the grid is the national highway; everybody taps into the grid. Kung magkaroon ng problema yung grid, walang makakagamit ng kuryente maski may dumadaloy na kuryente,” Alabanza stressed.

In a power sector forum organized by the Cagayan de Oro Chamber of Commerce and Industry Foundation, Inc. last week, Eugene H. Bicar, assistant vice-president for Mindanao systems operations of NGCP, showed that from the 727 MW of installed capacity, the current peak capability of the Agus hydropower plants is only 467 MW.

The lower output can be traced to several issues, officials said.

Pedro C. Ambos, Jr., National Power Corp. (Napocor) officer-in-charge for operation and planning, explained in the same forum that the state power firm could not operate the hydropower plants at maximum capacity as the discharge of water that will allow such output will flood low-lying areas in Lanao del Sur province where the plants are located.

Agus 1, for example, is limited to 45 MW from its 80-MW installed capacity, even as the power needs of the distribution utilities in the last quarter have outstripped the allocation in their contracts with Napocor, he said.

Mr. Ambos also admitted that Napocor’s funds for maintenance and operations have been cut in preparation for the planned privatization of the power plants.

Construction of infrastructure to protect communities from possible flooding, he added, is being undertaken by the Department of Public Works and Highways.

NGCP’s Mr. Bicar, for his part, stated the company’s position that Mindanao’s power woes are due to generation deficiency and not due to failure to renew Ancillary Service Procurement Agreement with power barges.

“We could not construct a power plant,” he said.

Meanwhile, the Mindanao Coalition of Power Consumers has sent out a petition to discontinue the implementation of the Leyte-Mindanao Interconnection Project of the NGCP.

“We believe that there is no need to carry out the phase 1 work, despite its approval by the Energy Regulatory Commission, as it is no longer economically feasible to carry out the main project itself,” the petition reads.

The coalition noted that the project was deemed feasible in the mid-’90s when power was considered to be transmitted from the geothermal plants in Leyte. However, with the present power requirements in Luzon and the Visayas, the power generated in Leyte would not be enough to supply Mindanao as well.

In Davao City, customers of the Aboitiz-led Davao Light and Power Co. will pay an additional P0.2276 per kilowatt-hour (kWh) this month as Napocor started to impose its so-called dry season rate.

Mindanao’s power supply is heavily dependent on hydroelectric power.

Rossano C. Luga, company spokesperson, explained that the rate has been applied since two years ago based on the imposition of the state-run power company.

Davao Light, however, said the transmission charge based on the billing from the NGCP will be lower by P0.0665/kWh as a result of lower ancillary charges. Ancillary charges are imposed on power consumed from sources that only operate as needed.
By NELSON V. CONSTANTINO, Editor-in-Chief and CARMELITO Q. FRANCISCO, Correspondent with Wire Reports

Gov’t to keep Mindanao hydroelectric power plants

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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.