MANILA, Philippines?Metro Manila and provinces in Luzon have been spared from two-to-three hour rotating brownouts, after San Miguel Energy Corp. reached an agreement with the French company Alstom to begin operating the 540-megawatt Limay combined-cycle power plant in Bataan.

?We were able to address the power situation and we can assure the public that there will be no brownouts in Luzon up to June,? Energy Secretary Angelo T. Reyes said at a news briefing on Tuesday.

Carlito Claudio, VP for operations at the National Grid Corp. of the Philippines, said the facility would be able to run at an initial capacity of 180 MW within the next 36 hours, or by early Thursday at the latest. Within a week, the capacity can be increased to its maximum 540 MW, he said.

Also, the 650-MW Malaya facility, which is being used at full capacity during peak hours, will soon run at lower capacity, Claudio added.

According to Claudio, the available capacity on Tuesday, even without the Limay facility operating, was at 7,100 MW, while projected peak demand was at 6,600 MW, which meant that the Luzon grid had power reserves of about 500 MW.

As a result, the Luzon grid is now on ?white alert,? which means that the island has enough reserves to address a possible breakdown of a power plant, Reyes said.

Reyes admitted, however, that since the Limay facility will be designated as a must-run plant, prices of electricity may increase.

?Well, you cannot have electricity at no cost. But I?m certain the application will be processed by Energy Regulatory Commission and the cost burden will be distributed equitably," he said.

In a separate briefing, ERC executive director Francis Juan said that if the Limay facility is designated as a must-run unit, the owner of the facility could ask for additional compensation to recover additional costs it will incur.

?We have to anticipate already that there will be increases in the generation costs of the distribution utilities and for this reason, the generation charges that will be imposed on end-consumers could increase,? Juan said.