Sunday, 28 February 2010

Energy department recommends declaration to President

Power crisis in Mindanao
Manila Bulletin

As consumers in the Mindanao grid suffer from horrendous eight-hour blackouts, the Department of Energy Sunday formally recommended to President Gloria Macapagal Arroyo the declaration of a power crisis in the main southern island to address the situation.

Energy Secretary Angelo Reyes said he proposed the power crisis declaration due to the worsening power supply situation in the region, mainly due to drought conditions resulting in a tremendous decline in the outputs of hydroelectric power plants in Mindanao.

“The power supply situation in Mindanao has worsened as a result of reduced capability by hydro electric power plants, Agus and Pulangui plants, by 80 percent and 90 percent, respectively, due to very low water inflow to the reservoir and nonavailability of the 35-MW Iligan diesel power plant,” Reyes said.

The anticipated generation deficiency for the grid may hit as high as 500 megawatts at the peak of the summer months, officials said.

“Historically, hydro electric power plants generate 53 percent of the total energy generation in the region. This was reduced to 26 percent last week and further down to 20 percent during the weekend,” Reyes noted.

The move, however, was not well-received by some stakeholders in the power industry who noted that the department has not yet thoroughly exhausted all options to alleviate Mindanao’s scant power supply.

They noted that the worsening supply situation in Mindanao is to be blamed partly on the energy department for its failure to offer alternatives such as the deployment of power barges to the region despite warnings of the El Niño phenomenon since last year.

With the power crisis declaration, Reyes explained, the Executive Branch could invoke Section 71 of the Electric Power Industry Reform Act which states that, “Upon the determination by the President of an imminent shortage of the supply of electricity, Congress may authorize, through joint resolution, the establishment of additional generating capacity under such terms and conditions as it may approve.”

The energy chief first dropped hints of the government’s plans through state-owned National Power Corporation (NPC) to lease modular generator sets to ease the supply situation in the grid, but he warned that this will be at a stiff price of P14 per kilowatt-hour (kWh) that would hurt consumers.

Immediately upon DoE’s recommendation, House Committee on Energy Chairman and presidential son Rep. Mikey Arroyo scheduled a hearing today to deliberate on the crisis.

According to Reyes, the recommendation of a power crisis declaration is the outcome of DoE-led power stakeholders’ meetings held in key cities in Luzon, Visayas, and Mindanao.

The power crisis declaration has to hurdle congressional approval before the President can act.

The energy secretary said fast-track solutions could include leasing power generator sets and the transfer of power barges from Luzon or Visayas. However, he said it will need two to three months to implement.

“It will be P14 per kWh for the deployment of modular gensets in Mindanao…we can enter into a lease, so we can terminate when we don’t need them anymore,” Reyes emphasized.

“That (lease of gensets) is the fastest solution, but expensive,” Aboitiz Power senior vice president Luis Miguel Aboitiz echoed.

However, Philippine Independent Power Producers Association Inc. (PIPPA) president Ernesto Pantangco said leasing generator sets “is not required at this time; the DoE hasn’t explored projected power demand for summer versus supply.”

He said there are the two power barges recently acquired by the Aboitiz group that can be utilized, while the Iligan diesel power plant can be brought back into operation.

“Only when figures are finalized can we see if modular sets are required,” Pantangco stressed.

Global Business Power Corporation president Jesus Alcordo said “we can implement load shedding in Mindanao. We can also try to redeploy some idle power barges in Luzon if necessary.”

Mindanao power stakeholders, congressmen and governors on the other hand called for the granting of emergency powers to Mrs. Arroyo to address the crisis.

“To purchase power generator sets will take many days or months and the President needs this power,” stressed Surigao del Sur Gov. Vicente Pimentel.

Surigao del Norte Reps. Francisco T. Matugas and Guillermo Romarate also voiced their sentiments on the ongoing power curtailment imposed by the National Grid Corporation of the Philippines.

Surigao del Norte Rep. Philip Pichay and Agusan del Norte Rep. Jose Aquino also favor emergency powers of the President. (With a report from Mike Crismundo)

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