DOE gives Shell, Petron 1 week to quantify power reserve

MANILA, Philippines – Energy Secretary Carlos Jericho Petilla is giving Pilipinas Shell Petroleum Corporation and Petron Corporation a week to quantify their power generation reserve for the summer of 2015, when Luzon’s power supply deficit is estimated to hit 300 megawatts.

At the  joint congressional power commission meeting at the House of Representatives on Thursday, September 11, Petilla said he is requesting both companies to disclose how much their power facilities could generate through a written document.

The government estimates that the power deficit next year would be at 300 MW, which will cost about $20 million per 100 MW.

Petilla said the estimates from the two companies would help the government calculate the committed power generation backup among firms who have explicitly expressed their bid to help mitigate what could be a looming power crisis in the summer of 2015.

Petron reportedly has a 140-MW diesel plant which is slated to be completed in September, but the company, according to Petilla, said the facility is generates less than 100 MW.

“It’s a lot less. I have to take it out of my equation — until we validate, and if it’s also connected to the grid,” Petilla said at the congressional meeting chaired by Oriental Mindoro  2nd District Representative Reynaldo Umali.

Petilla told the congressional panel that Petron  has a 20MW-power facility.

“Until they actually give to us the figure, that’s the only time we put it on our list,” he said.

As the DOE makes a list of of power reserves, Manila Electric Company (Meralco) has added 17 establishments in Metro Manila to its the interruptible load program (ILP).

ILP registered establishments reduce their energy consumption to help ease the strain on power supply.

Alfredo Panlilio, Meralco senior vice president, said there are currently 13 establishments participating in the ILP which collectively reduce electrical load by 118 MW.

The additional 17 ILP enrolees in September could add load reduction by 47.8 MW, he said.

But Petilla said he would rather not fully rely on the ILP program as “these are all voluntary.”

“So there are times they’d rather (only) use a certain portion for the grid,” he said.

ILP-enrolled establishments could only run the self-power curtailment program as it would entail issues on maintenance.

During the meeting, Umali asked Meralco to clearly define the ILP terms. He said that while the ILP is a voluntary program for establishments, “we have to be agressive.”

Petilla urged the private sector, especially those with power facilities, to formalize their intentions by submitting to DOE their plans to contribute to the energy reserve for 2015.

“We have so many intentions. My problem is that the intentions don’t materialize,” he lamented.

Petilla said the initial deadline for the committed capacity was scheduled on August 31, but had to be extended due to the lack of private sector participation.

“If we don’t have the numbers signed up, let’s contract. If ILP comes in, well and good because we don’t have El Niño taken into account yet,” he said.

If the total number of committed capacity falls short of the deficit estimate, the government’s last resort is for President Benigno Aquino III to invoke Section 71 of the Electric Power Industry Reform Act of 2001. (READ: Aquino seeks Congress help to address power shortage)

Under the provision, the highest executive official is authorized to contract additional power supply without going through Congress.

(READ: Power emergency: what it means)

Representative Henedina Abad urged the DOE to be transparent in dealing with all the available options instead of tapping the “last resort.”

“I am worried of Section 71 because it brings bad memories,” she said.

Though Section 71 is different from the grant of emergency powers to then President Fidel Ramos to resolve the crippling power crisis during his time, Abad was apparently referring to it. High electricity rates in the Philippines – among the highest in the region – are blamed on government contracts with power industry players inked during the Ramos administration.

However, Petilla said if DOE is able to gather the needed amount of commitment, “then there is no need” for the emergency powers. -Rappler.com