Gov’t wants to buy P6B worth of power

ENERGY Secretary Carlos Jericho Petilla. INQUIRER FILE PHOTO

MANILA, Philippines–The government is seeking an authority to buy or lease at least an additional 300 megawatts (MW) of power at a cost of P6 billion to avert brownouts next year but only as a “last resort,” Energy Secretary Jericho Petilla said on Thursday.

And given the time constraints, the government preferred that no public bidding be held for the purchase or lease of modular generator sets, Petilla told senators at a hearing by the energy committee.

Sen. Sergio Osmeña III, chair of the energy committee, said he would recommend to his colleagues not to grant such authority.

The committee is set to conduct more hearings on the matter.

If at all, Osmeña said it would be cheaper to buy power from participants in the so-called interruptible power load (ILP).

Last resort

“These generating sets are the last resort,” Petilla said during the hearing on the proposed enactment of the joint resolution authorizing the President to establish an additional generating capacity in accordance with Section 71 of the Electric Power Industry Reform Act (Epira).

Section 71 states that Congress could allow the “establishment of additional generating capacity under such terms and conditions as it may approve.” The government is prohibited to contract additional generating capacity.

At the hearing, Petilla said the government was proposing to contract the additional generating capacity through Malampaya funds.

He said President Aquino had actually given orders to the Department of Energy (DOE) to exhaust all means “before we raise Section 71.”

Cheaper if leased

Petilla later told reporters that the additional capacity of 300 MW would cost the government at least P6 billion, if leased, and P10 billion, if purchased.

Emmanuel Ledesma, president of Power Sector Assets and Liabilities Management Corp., said the rate of contracting 200 MW would cost P2.5 billion. Some 1,000 MW would cost P12.5 billion.

Ledesma indicated that a purchase would nearly cost the same as the lease, so it would be more prudent to buy the bunker-fired modular generator set, then privatize it and bid it out or use it as a “security asset.’’

“The price is the same. We should focus on purchase,” he said.

The set would run for seven hours a day from March to June at an annual operating cost of P13 per kWh, which is broken down into P11 for fuel cost and P2 for operation and maintenance, Ledesma said.

“If we charge the consumer P14 for 300 MW running five hours a day, five days a week, overall effect to the consumers is roughly eight centavos. Just for that month,” Petilla said.

Sen. Ralph Recto issued this caution: “Assuming we give that (emergency power) to you, be very careful with it. If you’re not able to solve the problem, you have a big problem. You’re the emergency problem.”