By Francis Allan L. Angelo
RABID opposition by parties riling against additional power sources in Panay may have forced Panay Electric Co. (Peco) to be conservative in contracting power from the coal-fired power plant of Global Business Power Corp. (GBPC).
Gil Altamira, GBPC commercial operations manager, said Peco’s contract to purchase 65 megawatts from the coal-fired power plant of GBPC is indeed conservative.
GBPC’s subsidiary Panay Energy Development Corp. (PEDC) will operate the new power plant in LaPaz, Iloilo City.
Aside from buying 65MW from PEDC for its baseload requirement, Peco will reduce its 72-MW contract with Panay Power Corp. (another GBPC subsidiary operating a diesel-fired power plant also in LaPaz) to only 15MW for its peak demand.
In sum, Peco will contract 80MW from PEDC-PPC plants. The contract is still pending with the Energy Regulatory Commission (ERC) which recently wrapped up its hearings on the new deal.
Observers said the contract might not be enough what with the new business establishments sprouting in Iloilo City and the explosion of suppressed demands with the looming full commercial operation of the coal plant next year.
As of May 2010, Peco’s peak load reached 78-80MW at the height of the summer season.
Altamira said that while Peco’s contract with PEDC-PPC will be enough for its present demands, it is still conservative when future demands are considered.
“At present, the contract will address Peco’s capacity problems. But in the next year or coming years, it will not suffice and we are looking at another round of power deficit by next year,” Altamira said.
Altamira said staunch opposition by anti-coal advocates obviously forced Peco to be cautious in its contract with PEDC.
“I don’t know why our friends from anti-coal groups are doing this but one need not be an engineer or economist to see that 80MW will not be enough for next year and the succeeding years,” he added.
The GBPC executive said Peco might exceed the 80MW peak load in summer of next year as new establishments and businesses consume the new capacity from the coal-fired power plant.
“Unless Peco contracts more power from available sources, we are looking at another round of power shortage by next year (in the city),” Altamira said.
Randy Pastolero, Peco vice president for operations, said aside from their contract with PEDC, they will also enter into a 10-MW “firm contract” with Lopez-owned Green Core Geothermal Inc. next year to augment its power requirements.
At present, Peco has a “non-firm” contract with Green Core but it hardly uses the power since it is available only during non-peak periods, usually late in the evening to early morning of the following day.
Iloilo City’s peak period falls between 10am to 7pm when most commercial establishments, particularly malls, are already open.
REDUCED RATES
Altamira said electricity rates will be reduced once Peco sources its requirement from PEDC by at least P1.84 per kilowatt-hour (kWh).
Altamira said Peco’s rate reduction is also conservative “maybe because they don’t want to make people expect too much at this time, but if the reduction goes up to P2, it will be good for Peco and the consumers.”
Altamira said GBPC’s decision to reduce Peco’s contract with the diesel-fired power plant is a “sacrifice” as the plant is still paying loans it contracted in its inception.
“We are trying to market the remaining capacity of the diesel-plant to interested utilities and to the National Grid Corporation of the Philippines for its ancillary services such as the reserves,” he added.
Since PEDC is embedded in Peco’s system, consumers will no longer pay for transmission cost which is presently pegged at P1.20 to P1.40 per kWh.
“If we sell P5 per kWh to Peco, it will become P6 to P6.50 per kWh because of transmission cost. Naturally, Peco consumers will enjoy a bigger price difference from those in the cooperatives,” Altamira said.
TESTING RATES
Since the coal-fired power plant began its load testing phase, it has been supplying electricity to Peco, easing brownouts except when the plant shuts down for minor adjustments.
Speculations are rife that Peco consumers might be made to pay for electricity supplied by the PEDC plant when it has yet to secure provisional authority from the Energy Regulatory Commission (ERC).
Altamira said PEDC’s contract with Peco has provisions on electricity supplied during the testing and commissioning stage which is sanctioned by the ERC.
Power plants undergoing load testing are allowed to supply power to utilities not only to try the plant’s reliability and compatibility with the grid but also to fill in power shortage.
Altamira said the electricity consumed by Peco during the load testing period can be recovered “but we cannot bill Peco yet until we have the go signal from ERC.”
Even if consumers pay for power used during the load testing period, Altamira said the price is discounted.
“Power produced during load testing and commissioning is very cheap (compared to the power generated by our existing diesel plant),” he said.
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