Gov’t, energy players miles apart–Umali

Oriental Mindoro Rep. Reynaldo Umali: Hardly had any details. INQUIRER.net/HOTARU NIITSU

MANILA, Philippines–Congress is having a tough time hammering out a law granting President Aquino special powers to address next year’s expected power crisis because the energy authorities and the players are miles apart on their projected costs and supplies.

Oriental Mindoro Rep. Reynaldo Umali, chair of the House energy committee, said Congress could not discern the extent of the special powers to grant the President because the Department of Energy (DOE) and power industry players led by the National Grid Corporation of the Philippines (NGCP) could not even agree on the extent of the power shortage.

“This is probably the reason why the President’s letter to Congress requesting special powers hardly had any details,” said Umali in an interview over dzBB radio.

On the one hand, Umali said Congress found the supply projections of the DOE too broad, with four scenarios expecting a shortage ranging from a low of 402 megawatts to a high of 1,200 MW (including an extended dry season from the El Niño).

On the other hand, Umali said the NGCP, which relied on actual data in the transmission of power to retailers and users, was working on a power shortage of only 442 MW.

Aside from differences in supply estimates, Umali said the DOE’s preferred solution—to lease additional capacity of at least 300 MW (computed at P1 billion to P2 billion per 100 MW leased)—was too prohibitive compared to a proposal to tap the excess energy capacity of private firms.

He said the Manila Electric Co. estimated the cost of sourcing from excess generator capacity at P200 million per 100 MW under the interruptible load program (ILP).

Umali said leasing power plants would lead to additional costs to consumers of between P14 and P26 per kilowatt hour versus the 62 centavos per kWh for the ILP lease option.

“The ILP is cheaper because we only pay for what we use, while the lease for power plants has to be paid whether we use it or not depending on the contract, which could be up to two years,” said Umali.

Umali said that private and public companies had pledged to commit between 1,300 and 2,000 MW from their embedded capacity or generator sets to address the shortfall.

While this commitment was higher than the worst-case-scenario shortage of 1,200 MW, Umali said there was no guarantee that these firms would fulfill their commitment.