Probe brownouts in Mindanao, lawmakers urged

CAGAYAN DE ORO CITY, Philippines—More organizations have joined the Mindanao Development Authority in calling for a congressional investigation into the two- to four-hour brownouts in certain parts of Mindanao as the island’s power supply deficiency further plummeted from its level 19 days ago.

Last week, the National Grid Corp. of the Philippines (NGCP) said the Mindanao grid lacked 178 megawatts, an increase of 40 MW from the 138 MW shortfall on February 22. The climb in power supply deficiency was largely due to a 38-MW drop in available capacity, from 1,117 MW on February 22 to 1,079 MW on March 12.

Clint Pacana, executive director of the Association of Mindanao Rural Electric Cooperatives (Amreco), said the inquiry of the House of Representatives must establish the true reasons for the frequent brownouts and surface available short-term remedies to check a worsening power crisis.

It should also result in outlining strategic measures that would permanently address the issues affecting the long-term viability of Mindanao’s power industry, Pacana said.

Amreco is composed of 33 electric cooperatives in Mindanao, 27 of which are connected to the grid. The rest are off-grid utilities.

“It was wrong for the Department of Energy to simply blame the electric co-ops for the brownouts because they did not tap existing nonhydropower generation capacities for their requirements,” Pacana said.

The failure to use these capacities led to the shortfall in power supply made available to the Mindanao grid, Energy Secretary Rene Almendras earlier explained.

Lucita Gonzales, secretary general of the Freedom from Debt Coalition (FDC) in Western Mindanao, said Almendras could be referring to the 200-MW combined capacity of the power barges operated by Aboitiz-owned Therma Marine Inc. (TMI), which sells power at P11 per kilowatt-hour.

“Why should Almendras force us to pay for high-cost power?” Gonzales said in a statement.

Pacana said: “We have to be sensitive to the demands of electricity consumers for reliable and affordable power. If we can no longer maintain this low-cost power regime, we might be losing the principal competitive advantage of Mindanao.”

It is, therefore, normal for the electric co-ops to seek low-cost power for distribution in their respective franchise areas, he added. “Before we opt for the high-cost power, are there available low-cost capacities to turn to? We are not privy to this information but we would like to think there are.”

Pacana revealed that 104 MW of TMI’s capacity is uncontracted, and even among those that contract power supply from it, only very few nominate it. In the power industry, nomination means tapping a generating capacity for use.

Audit

Iligan information officer Melvin Anggot, said the city government recently urged the Commission on Audit to conduct a technical and financial audit of the Agus-Pulangi hydropower complexes to establish the true condition affecting the operation of these plants.

According to a presentation by the NGCP of the power industry as of February 20, the Agus-Pulangi complexes provide 53 percent of Mindanao’s electricity needs. Of its combined installed capacity of 982 MW, the hydropower generating assets only runs at 635 MW, or a third short of its optimum potential.

The Agus and Pulangi power generation assets are owned and operated by the state-run National Power Corp. (Napocor) although it has been up for privatization. Napocor operates under the Private Sector Assets and Liabilities Management Corp. (PSALM), whose mandate is to auction off the plants to private interests.

One generating unit of Agus 7 with a 27-MW capacity and another of Agus 6 with a 25-MW capacity are on forced outage since Oct. 28, 2010, and Jan. 15, 2011, respectively.

As early as October 2011, NGCP had been issuing media advisories about load curtailment throughout Mindanao due to “planned outage and reduced capability of several plants.”

Emergency powers

But Pacana said a proper inventory of existing installed capacities would settle the issue over available options.

The inventory, he added, should specify whether these are installed or not. Of those installed, further classification whether these are onstream. Being onstream means the plant has provisional authority to operate.

“To initiate fast measures, the President might need some kind of emergency powers specifically to deploy power barges from other grids into Mindanao, and put onstream-installed capacities which could not be tapped because of some legal requirements like contracting,” Pacana explained.

He said the President might have to be empowered to direct the operation of generating capacities at government-mandated price for the extent of the crisis period so that consumers are protected against exorbitant rates.

Anggot said that amid the capacity shortfall, the Iligan city government had wanted to operate the 50 MW of the 100-MW Iligan Diesel Power Plant, which it acquired from the Alcantara Group via payment of local tax delinquency.

But the plant has no provisional authority from the Energy Regulatory Commission, and undertaking the process could take three to six months.

Reneged on role

Dave Tauli, vice president of Cagayan de Oro Power and Light Co., said PSALM had effectively reneged on its role to provide reliable and affordable power to Mindanao consumers by privatizing the Napocor assets.

He cited Power Barges 117 and 118, which were sold to TMI. The sale effectively made the capacities, 200 MW in all, off-stream because it needs to be contracted and nominated for use, and its power has been sold at a higher cost now.

Gonzales said PSALM should ensure that the hydropower assets are running to its full capacity even as debate on whether these should be privatized or not was raging.

“The bottom line should be providing better service to Mindanao consumers,” she pointed out.

During a public hearing in Iligan on March 9, Joey Fabrigar, legal counsel of Iligan Light and Power Inc. (Ilpi), said PSALM had allocated the local utility only 23 MW of its expected peak requirement of 39 MW.

Fabrigar said Ilpi was constrained to tap TMI to fill its deficiency because the latter requires a 20-year supply contract, which means a long lock-in period for the consumers to be burdened with high retail power rates.