Power refunds planned in Mindanao

One of the biggest power firms operating in Mindanao has started the process of giving refunds to consumers that could ease electricity rates on the island that is still reeling from an unstable power supply.

In a statement, Aboitiz Power Corp. (APC) said it would comply with a ruling by the Energy Regulatory Commission (ERC) last month that ordered Therma Marine Inc. (TMI), a subsidiary of APC, to reduce the amount it wants to recover for operating diesel-fed Power Barges 117 and 118.

The fees are tucked in APC’s service agreements with the National Power Grid Corp. of the Phils. (NGCP).

“The welfare of the Mindanao public is our topmost priority, so we are coordinating closely with the NGCP to work out the fastest possible way to effect the refund,” the statement quoted Jovy Batiquin, Therma Marine chief operating officer, as saying.

According to the statement, TMI wants to start the refund process as early as possible and is currently in the phase of complying with requirements to do it.

“We have decided to not file any motion for reconsideration. We won’t contest the ERC’s decision,” Batiquin said.

The ERC, in its order, reduced TMI’s capital recovery cost for Power Barge 117 to 55.64 centavos per kilowatt-hour (kWh) in 2010 and 53.02 centavos per kWh for 2011, from 77.68 centavos per kWh.

For Power Barge 118, the approved recovery cost was also reduced to 51.50 centavos per kWh in 2010 and 49.12 per kWh in 2011, from 77.68 centavos per kWh.

In its statement, TMI said 90 percent of its expenses on the two power barges are on fuel, “which is a pass-through charge.”

“The remaining 10 percent is for the salaries of our employees, spare parts, insurance, maintenance costs and capital recovery,” Batiquin said.

The amount that would be refunded, however, has yet to be determined and will have to be submitted to the ERC for approval.

If approved, TMI will refund the NGCP which, in turn, would refund electric cooperatives and distribution utilities. The power distributors are expected to pass on the refund to consumers.

“Therma Marine’s oil-fired power barges continue to be the most efficient and lowest cost-peaking plants in Mindanao, and we strive to further improve our operations. The refund will mean savings for the consumers in terms of lower energy costs,” Batiquin said.

Each power barge can generate 100 megawatts. These were contracted by the NGCP in 2010 to serve the Mindanao grid at the height of brownouts that year, blamed partly on a prolonged drought that reduced electric supply from the island’s hydropower facilities.