Mindanao should brace for higher power costs

Mindanao residents must shoulder an average increase of about P3 per kilowatt hour in their electricity bills

 POWER COSTS. Residents in Mindanao will have to cough up more cash to get stable electricity supply. File photo

MANILA, Philippines – In order to get stable electricity supply, Mindanao residents must shoulder an average increase of about P3 per kilowatt hour in their electricity bills. 

In an interview on ANC on Saturday, March 23, Energy Secretary Jericho Petilla said one of the options right now has to be presented to the electric cooperatives. On April 1, Petilla will be calling a meeting of all electric cooperatives (ECs) in Mindanao. 

The meeting will give ECs options on what they can do to have additional power. Prices range according to availability of power. Some can provide power for 6 years or 3 years, or even for 6 months. 

The longer the contract, the cheaper it is and the shorter the contract, the more expensive it is. The electric cooperatives will be made to choose their own preferred arrangement. 

“I don’t want to become a salesman for these private companies but I guess we need to educate them on the best options we have, given the situation that we’re in,” Petilla said. 

“If you ask me, if I take the most expensive option, there will be power in Mindanao, anywhere from 6 to 8 weeks. The thing is, it’s expensive but I’d like to give Mindanao a taste of what is coming if they took an expensive source of power,” he added. 

Petilla said this will increase power costs from around P6.20 to around P10 per kilowatt hour for the expensive source. This, he said, was still lower than the P12 per kilowatt hour that residents in Metro Manila pay for. 

For her part, Mindanao Development Authority Chairperson Luwalhati Antonino said in General Santos, they have made their calculations and this will result in increasing power costs to around P8.50 per kilowatt hour from around P6. This is what Davao residents are now paying. 

“Some of them will actually reach as high as P9 or P10 but the good thing here is (would you rather have) P6.20 and no power, or P9 where you have power? That’s the choice that the local residents have to decide on. The good thing is, these are all short-term. If you take the most expensive option which is 6 months, you’ll be paying P9 to P10, after 6 months, you put in the cheap one and you’ll probably pay lower by a peso, and then by 2015 when the coal-fired plant (is up and running) then your P6.20 will probably become about P7 on a long-term basis. We just simply have to bite the bullet at the moment,” Petilla explained.

Petilla said this is a better solution than batting for emergency powers for the President which will take much more time. 

He said asking for emergency powers for the President will require Mindanao residents to wait at least 3 or 4 months after Congress reopens in July to decide on these emergency powers. 

“We’re trying to fast-track this as fast as possible. Somebody mentioned earlier, you know the President should invoke his emergency power. One issue with emergency powers is, it takes time. It requires a joint Congress resolution. The next Congress will resume in July in the SONA. I’m not from Mindanao but I can’t wait that long, I have to act now,” Petilla said. 

Failure of election?

Petilla said the government is willing to concentrate power in various schools that will be converted into polling precincts for the coming May elections. 

He said that the government is already in the process of identifying the locations of the schools to ensure that PCOS machines to be used in Mindanao or at least most of the region on May 13 will not be affected by power shortages or failures. 

The Energy Chief also said the government is banking on lower electricity use on May 13 because it’s a holiday. He said usually, Filipinos consume less electricity on holidays and this will help free up some power in Mindanao to ensure PCOS machines will continue working. 

The National Power Corp (NPC) is also ready to release impounded water to ensure that Mindanao has enough hydropower in May. The government is also banking on the resumption of the operations of several power plants. 

Petilla said for one, the oil-fired power barge of AboitizPower Corp will be up and running before the May 2013 polls. This is after it developed technical problems last March 18. 

Aboitiz unit Therma Marine Inc said in a statement that a generator of Mobile 1 in Maco, Compostela Valley was shut down indefinitely to prevent further damage. It was running constantly for 72 hours prior to the incident.

Economic impact

This early, Antonino said Mindanao’s power woes are affecting the growth and development in the region. Many investors have expressed concern over the brownouts. 

The power outages are already doing damage to small businesses who rely on a steady source of power for their operations.

But she said the government remains confident that by 2015, Mindanao will be home to many new power investments. Antonino said there are also options available to Mindanao. 

She said one of these options includes a private company based in Singapore and London who can offer 20 megawatts of interim power solutions to the region. This company is willing to lease power for one or two years. 

Petilla said bridging the power gap between now and 2015 is the main challenge in dealing with the power deficiency in the Mindanao region. – Rappler.com

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