Meralco gets ready for the looming power crisis

MANILA, Philippines – The Manila Electric Company (Meralco), the country’s largest electricity distribution firm, has mapped out key policy actions to address the power supply deficiency in Luzon next year.

Meralco President Oscar Reyes said Tuesday, July 29, that there are things that Meralco “can do” on its own to help mitigate the impending power crisis.

On the top of Meralco’s key policy responses to the power crisis – which can be done without vesting emergency powers on the Chief Executive –  is to move the scheduled maintenance shutdown of the Malampaya natural gas facility.

“If it can be moved to a month earlier when there is lower demand for electricity,” Reyes said and added that as a protocol, the government should “run both blocks of the Ilijan power plant” using diesel in lieu of bio-diesel during the Malampaya shutdown scheduled from March 15 to April 14, 2015.

The Ilijan power facility has two units with a combined capacity of 1,200 megawatts (MW).

Also, Meralco urged the Power Sector Assets and Liabilities Management Corp. (PSALM) to fast track the rehabilitation of the Malaya thermal power plant Unit 1 in Rizal. If this can be done, the Malaya facility can run at full capacity of 650 MW.

There should be “careful and prudent scheduling of maintenance shutdowns” and an “improvement of plant reliability and availability before second quarter of 2015” should be implemented, Meralco said.

Meralco also called on the National Grid Corporation of the Philippines (NGCP) to fast track the completion of its transmission projects, particularly the Zapote sub-station reinforcement project.

Expanded ILP

Meraldo may also expand the Interruptible Load Program (ILP) “as a last resort,” Reyes said.

Under the ILP, customers with large loads, like commercial establishments, will be asked to operate their own generator sets if the grid operator projects a need to augment generation capacity in the Luzon grid. Through this, the aggregate demand for power from the system will be reduced to a more manageable level, helping ensure the availability of supply during the season.

Targeted ILP participants are those with large embedded generation capacities such as malls, large business establishments, and factories. Among those that have signed an agreement on ILP with Meralco include Megaworld, Ayala Land, Robinsons Land, Shangri-La Malls, SM Prime Holdings, Metro Gaisano, and Waltermart.

On the recommendation of Energy Secretary Jericho Petilla to President Benigno Aquino III  for the possible declaration of state of emergency in the power sector to avert a potential power crisis next year, Reyes said, “It’s hard for me to make a judgment. It’s the call of the (Energy) Secretary and of the President.”

But he cited actions that Meralco can do to help mitigate a possible power supply problem.

“These are the things we can do. It’s really not for us to say if [emergency powers] are needed,” Reyes said.

Aquino made no indication in his 5th State of the Nation Address Monday, July 28, whether he will seek emergency powers from Congress to address the looming power shortage.

Instead, he said he instructed Petilla to coordinate with the Joint Congressional Power Commission, Energy Regulatory Commission, industry players, and consumer groups to come up with solutions to the problem. (READ: Aquino keeps mum on emergency powers proposal in SONA)

Petilla had said the projected demand by 2015 is 9011 MW – higher than this year’s actual demand of 8717 MW. This can be attributed to the massive economic expansion and development in the country, Petilla added.

Based on DOE projections, there is a deficit of 200 MW next year. With this, energy supply is thin by March to May 2015, the months with the highest electricity demand for the year. To address this, Petilla said an additional 400 MW-500 MW capacity is needed to act as a buffer supply during the peak months. – Rappler.com