Meralco worried over power supply next year

Posted at 07/30/14 4:18 AM

MANILA, Philippines - Manila Electric Co. (Meralco), the country's largest power distributor, has expressed concern over next year's power situation, echoing Energy Secretary Carlos Jericho Petilla's fears of a looming power shortage.

Meralco president Oscar Reyes said there are things that can be done to avert a crisis but stopped short of calling for the declaration of a state of emergency in the power sector, saying it is a matter best left for the government to decide.

For instance, Reyes said the scheduled month-long maintenance shutdown of the Malampaya deep water-to-gas facility in offshore Palawan next year could be rescheduled to before or after summer so power supply won’t be that tight.

Demand is traditionally higher during summer when consumers use more electricity due to higher temperature.

“I think the government is in the best position to decide on that. There are things we can do. We’d like to discuss these with the secretary but I think it’s the call of the secretary and the President. One of the things we can do is more prudent and careful scheduling of maintenance shutdowns,” he said.

The consortium behind Malampaya is set to shut down the facility from March to April 2015 as part of its preparations for the third phase of its expansion program.

The shutdown will affect the output of three natural gas power plants: the 1000-MW Santa Rita, the 500-MW San Lorenzo and the 1,200-MW Ilijan power plants in Batangas.

Reyes said another measure is for the Ilijan power plant to operate on straight-run diesel instead of bio-diesel as mandated under the Biofuels Act of 2006 during the shutdown period. The use of bio-diesel reduces the plant’s output.

Reyes also proposed the expansion of the so-called Interruptible Load Program (ILP) where large users can sell their excess capacity to the grid.

Under the program, large electricity users such as malls or big industrial users can sell their excess generating capacity to the grid when the situation is tight.

Petilla proposed the declaration of a state of emergency in the power sector by invoking Section 71 of the Electric Power Industry Reform Act (EPIRA) to give the government the authority to put up additional generation capacity.

The declaration of a state of emergency will allow the government, through the Power Sector Assets and Liabilities Management Corp. (PSALM), to tap additional power capacity for the summer of 2015.

Petilla said there is a projected deficit of 200 MW for April and May next year.

Under the plan, the government through PSALM will rent diesel-fired power facilities on short-term contracts of two years if possible.

The facilities will not run when there is no yellow alert or when there is enough supply. It also cannot enter into bilateral contracts and will trade in the spot market accordingly.

Based on Petilla’s simulations, the cost of electricity will not go up because the plant will trade at the Wholesale Electricity Spot Market (WESM), thus the rates would be market driven.

The EPIRA prohibits the government from constructing power plants.

However, Section 71 of the law states that the President, upon determination of an imminent shortage of supply of electricity, may ask Congress for authority through a joint resolution, to establish additional generating capacity.

No power yet

It’s been almost two weeks since Typhoon Glenda hit parts of Luzon and the Visayas, yet some areas in Batangas, Laguna, Rizal and Quezon remain without power, according to data from Meralco.

The company is working round the clock to restore electricity in the remaining isolated areas, said Al Panlilio, Meralco senior vice-president and head of customer retail services.

However, he said there are areas that are difficult to reach because of damaged roads.

Latest available data from Meralco showed it has restored power in 99.71 percent in Rizal, 96.04 percent in Batangas, 94.67 percent in Laguna and 79.05 percent in Quezon.

It said power is restored in 98.64 percent of Meralco customers.

For its part, the National Grid Corp. of the Philippines (NGCP) said it has completed repairs of all its damaged transmission and sub-transmission lines.

NGCP restored 122 lines within 11 days after the typhoon made landfall, making its full services available to all its South Luzon and Bicol grid customers.

On July 27, NGCP energized its last remaining lines in Quezon province – the Gumaca-Atimonan and the Gumaca-Hondagua-Tagkawayan 69-kilovolt (kV) lines, the company said in its advisory.

“Despite the bad weather, we fulfilled our promise to restore facilities within two weeks, completing our work ahead of schedule. Our line personnel in the field have been working 24/7 in the past week to restore our lines,” said NGCP president and chief executive officer Henry Sy Jr.

NGCP said it is ready to conduct similar disaster management activities to ensure reliable power transmission service.