Meralco customers to pay for ILP?
Meralco customers to pay for ILP?
Meralco has to pay its Interruptible Load Program participants, thus its customers may have to shoulder an additional 7.5 centavos for monthly generation charge

MANILA, Philippines – An additional P0.075 ($0.0017*) per kilowatt hour (kWh) may reflect in your monthly generation charge – the biggest bulk of your electricity bill – as the Manila Electric Company (Meralco) needs to compensate its Interruptible Load Program (ILP) participants.

The utility firm estimates a P200-million ($4.470 million) payment for every 300 megawatts (MW) of accumulated committed interruptible load (CIL) capacity from the ILP participants. Meralco, in turn, would have to pass this on to its customers.

Meralco proposed the ILP, a scheme where energy users with large loads, such as business establishments and factories, will be required to run their standby generator sets to ease the demand for power from the grid during peak hours. Through this, the aggregate demand for power from the system will be reduced to a more manageable level, helping ensure the availability of supply.

“It’s a P0.075 ($0.0017) per kWh rate impact on the generation charge per 300 MW deloaded for 5 hours a day on all weekdays for one month. Thus, if only 200 MW is deloaded, then the rate impact would be around P0.05 ($0.0011) per kWh,” Meralco head for utility economics Lawrence Fernandez explained on Thursday, October 9.

Meralco already signed up a total of 143 MW of CIL capacity from various ILP participants.

The utility firm continues to approach customers to invite additional participants. The CIL capacity would help the government address the power shortage anticipated next year.  

ILP as a viable solution

ILP is still seen as a viable solution to help solve the power supply deficiency anticipated in the summer months of 2015 after the Senate, during the Technical Working Group (TWG) meeting on Thursday, told Energy Secretary Carlos Jericho Petilla that Congress is not keen on authorizing President Benigno Aquino III the special powers he seeks.

During the meeting, Senate committee on energy chairman Senator Sergio Osmeña III said it was the sentiment of most lawmakers that government should distance itself from the power generating sector, saying this is best left for the private sector to handle. (READ: Osmeña computation shows no need for emergency powers)

The President, if granted special powers, can invoke Section 71 of the Electric Power Industry Reform Act (EPIRA).

Section 71 of EPIRA states that the President, upon determination of an imminent shortage of supply of electricity, may ask for Congress for authority, through a joint resolution, to establish additional generating capacity under such terms and conditions.

When sought for comment, Petilla said the Department of Energy (DOE) will continue to work on the ILP by soliciting more participants. To date, DOE has so far gathered a firm commitment of 101 MW of ILP. An additional 171 MW may be added until February, he said.

The agency was originally looking for 700 MW in additional power generating capacity, of which 100 MW is meant to cover the decreased supply. Considering a “mild El Niño” scenario, the additional projected capacity requirement for Luzon will be 800 MW and as much as 1,200 MW in “extreme El Niño” case.

But since the 150 MW Calaca coal-fired power plant expansion project will fail to meet its commercial launch in March next year, the anticipated shortage will increase to 900 MW.

The Calaca power plant is the biggest power plant, in terms of capacity, which is supposed to be online by summer 2015.

Those participating in ILP through DOE will be compensated by the agency, reimbursing their fuel expenses and extending reasonable recovery. Other terms and conditions for the optimal operation and pricing of the ILP are also studied.

South Korean firm, Malaya

Meanwhile, the Power Sector Assets and Liabilities Management (PSALM) Corporation has awarded the 1-year operation and maintenance service contract (OMSC) for the 650 MW Malaya thermal power plant to South Korean firm STX Marine Service Co. Ltd.

PSALM President and Chief Executive Officer Emmanuel R. Ledesma, Jr. said Thursday that his office issued on September 30 the notice of award to STX Marine. The winning bid of STX Marine for the Malaya OMSC has been recalculated to P297,799,028.80 ($6.67 million).

The Malaya plant, located in Pililla, Rizal is managed by PSALM through an OMSC. It consists of a 300-MW unit with a once-through type boiler and a 350-MW unit fitted with a conventional boiler. It was rehabilitated in 1995 by the Korea Electric Power Corporation under a 15-year rehabilitate-operate-manage-maintain agreement.

Ledesma added that government is studying options for the overhauling of Malaya Unit 1 to make it available in time for the 2015 Malampaya shutdown.

The shutdown of the Malampaya facility from March 15 to April 14, 2014, which, according to consortium members could no longer be rescheduled, worries the DOE and PSALM as this is crucial to Luzon’s power requirements. –





($1 = P44.68)

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