Mindanao power crisis: 2010 all over again, but with differences

ILIGAN CITY—Brownouts in several areas of Mindanao became more frequent and longer by middle of February this year. Several days later, it slid into a crisis.

It was history repeating itself. In 2010, during the same months, Mindanao was reeling from a debilitating shortage of electricity that even threatened to derail the automation of elections that year on the island.

It was a crisis replete with doomsday scenarios and technical terms, one of the most dreaded of which was load shedding.

Load shedding is what those in power to control power supply do when the amount of electricity fails to do two things—meet demand and fill the required level of reserve to keep the electricity grid stable.

The 2010 and current power crises in Mindanao are both similar and different in several ways.

What remains the same for the 2010 and the current crises is that, in both cases, officials are saying that the cause is the reduced dependability of Mindanao’s power generating plants, the biggest of which are hydroelectric.

The plants are still owned by government through the National Power Corp. (Napocor), which is up for sale under the Electric Power Industry Reform Act or Epira but has no takers so far.

What’s new, what’s not

While the culprit remains the same, the 2010 and current crises are different in significant ways.

First, the 2010 crisis was preceded by a long dry spell that was felt until the fourth quarter of 2009. The drought drastically reduced the capacity of Mindanao’s hydroelectric plants. The Agus complex ran at only 20-percent capacity and the Pulangi, 10 percent, according to the National Grid Corp. of the Philippines (NGCP).

Today, much of Mindanao is experiencing a wet summer. As of Feb. 20, NGCP said water level in Lake Lanao was 700.73 meters. At about the same time in 2010, the level was 699.15 m, a critical mark.

Second, peak demand was higher in 2010 than today. Demand reached its peak on March 9, 2010, at 1,472 megawatts. This year, the biggest demand was 1,291 MW on March 28.

Data from the Association of Mindanao Rural Electric Cooperatives (Amreco) and distribution utilities peg average demand at 1,282 MW—800 MW for 27 electric cooperatives (current use is just 770 MW), 288 MW for power firm Davao Light (its peak demand in 2010, too), 24 MW for power firm Cotabato Light, 131 MW for power firm Cagayan de Oro Electric Power and Light Co. and 39 MW for power firm Iligan Light and Power Inc.

Heydays

At the start of 2010, Napocor had control of 94 percent of sources of 1,672 MW in the Mindanao grid as it then operated its own plants and had contracts from independent power producers.

At least 52 percent of the power that Napocor supplied in 2010 came from hydroelectric sources.

Today, Napocor no longer controls the sources of 200 MW of electricity that comes from diesel power barges Nos. 117 and 118 that were sold to private firm Therma Marine Inc. (TMI), an Aboitiz company, in February and March 2010.

The sale of the barges removed control of these from the hands of Napocor, which is now under control of the Power Sector Assets and Liabilities Management, a government agency that supervises Napocor until it is privatized, or sold.

Since their sale, the barges could no longer be relied upon for cheaper power as these are now in the hands of a private company.

TMI now charges P11 per kilowatt hour for electricity produced by the two barges, according to Clint Pacana, the Amreco executive director.

In 2010, the capacity of Napocor-owned small power plants grew from 97 MW to 137 MW.

In the same year, the Sibulan hydro plant of another Aboitiz-owned firm, Hydro Electricity Development Corp., began operations. It delivered 34 MW from its 42-MW capacity.

Downfall period

With privatization lurking and a continuing poor record in maintenance, Napocor reduced its share in generating capacity to 81 percent of demand by end 2010. At the same time, there was a slight increase in capacity of hydroelectric plants that Napocor also owned.

In 2010, 30 MW was available from the diesel plant owned by private firm Northern Mindanao Power Corp. (NMPC). The plant is not running anymore.

NMPC has another plant capable of producing 54 MW that is not running since 2007, according to engineer Pedro Ambos, of Napocor’s Mindanao Generation Office, in a 2010 report.

In October 2010, Agus 7 has stopped operating a 27-MW generating unit. In January this year, Agus 6 stopped operating a 25-MW unit.

That the plants continue to rot could be part of the inefficiency disease that has afflicted Napocor ever since, according to critics. Some, like Lucita Gonzales of the group Freedom from Debt Coalition (FDC), wonder aloud if it was intentional to pave the way for the plants’ bargain sale.

According to the NGCP spokesperson, Cynthia Alabanza, the dependability of a power plant is determined by how it is maintained.

Today, even without a dry spell, the output of Napocor’s hydroelectric plants is lower than in 2010 when Mindanao was reeling from drought.

FDC’s Gonzales said the reduction in output of the hydroelectric plants at a time when water was abundant compared to 2010 “raises disturbing questions.”

While privatizing the hydro plants is the right thing to do, letting them rot to set the stage for a bargain sale is definitely not, said Gonzales.

“If the inefficiency of the plants is true, why was this left uncorrected?” Gonzales said. The problem, she said, could be foreseen “unless there was a deliberate policy to overlook it.”

What ifs

Had the plants run on levels of efficiency circa 2010, these could have produced up to 1,255 MW. Average demand for power in Mindanao was 1,233 MW in March.

The group Amreco is seeking an inventory of existing generating plants in Mindanao to determine which could continue supplying low cost power amid a statement made by Malacañang officials that for the people of Mindanao to continue enjoying electric supply, they have to pay the cost.

The Philippine Chamber of Commerce and Industry has warned of unduly raising power costs in the process of addressing the crisis in Mindanao.

“Suspicions persist that the crisis was made up,” FDC’s Gonzales said.

“Businesses have suffered. It is but proper that those responsible, whether by omission or commission of certain acts, be held accountable,” she said.