Mindanao power rates could go up by up to P4/kwh

MANILA, Philippines—Power rates in Mindanao may shoot up by P1.80 to as much as P4 per kilowatt-hour should the electric cooperatives on the island decide to adopt the government’s recommendation that they acquire their own diesel-fired generators as a stop-gap measure.

On the sidelines of a meeting with Mindanao-based electric co-ops on Tuesday, Energy Secretary Carlos Jericho L. Petilla noted, however, that the price increases will be felt only over the short-term and will vary depending on how long the generator sets will run. The estimate of P1.80 to P4 per kWh assumes that the modular gensets will be running from 4 to 10 hours a day.

At present, Mindanao suffers from outages lasting two to six hours a day. As of Tuesday, the power supply deficit stood at 155 megawatts.

“I’m giving them as many choices as I can. Unfortunately, there isn’t much. There will be power in Mindanao in 2015 but under certain conditions, and the conditions are basically for the electric cooperatives to have contracted new capacities,” Petilla said. “So the option from now up to 2015 is to rent or purchase gensets, which is going to be very expensive.”

“Electric coops are not obliged to choose one option. They can choose not to choose. That means the people will suffer. There are electric co-ops that said that they can’t raise prices, so they would rather have the brownouts. So far, 20 out of 24 electric coops are [amenable to the options],” he added.

Although the proposed solution was merely an option for the electric co-ops, Petilla stressed the need to acquire these gensets as utilities must have their own embedded capacities to tap into during emergencies.

The energy chief added that the renting or buying of gensets was the quickest of three options presented at Tuesday’s meeting on how best to solve the worsening power situation in Mindanao.

The other two solutions include the “interruptible load program,” wherein users with their own facilities could generate their own electricity without having to tap into main grid; and the Interim Mindanao Energy Market (IMEM), which will serve as a trading platform where certain users may sell their excess capacities, subject to compensation based on market prices.

According to Petilla, the Department of Energy has already earmarked P4 billion for the gensets. The budget will be sourced from the Malampaya funds and will be given to electric co-ops in the form of loans.