750 MW ready under ILP

Companies with diesel generators may provide up to 750 megawatts (MW) of back-up power to help ease peak demand during next year’s power crunch, the Department of Energy (DOE) told the Inquirer.

Energy Undersecretary Raul Aguilos said the Manila Electric Co.’s (Meralco) franchise area alone may yield 100 MW to 150 MW of dependable back-up power under the Interruptible Load Program (ILP). Aguilos said via text message that the estimate, reported last week by industry players, is still being verified.

On top of the ILP capacity in Meralco’s franchise area, Aguilos said up to 600 MW may be available from among customers of the Retail Electricity Suppliers Association (Resa), an organization of electricity suppliers.

Meralco’s own estimate is about 115 MW of ILP capacity in its area. Other industry sources said the distribution utility’s estimate is too small and that total self-generation capacity in Meralco’s network is actually about 2,300 MW. The problem, sources said, has always been how to compensate (and thus encourage) manufacturers, hotels, malls and residential buildings with generators given their fuel cost.

Estimates on the actual power supply gap next summer varies depending on who is talking but generally the estimates range from 600 MW to 800 MW.

The DOE has been meeting with power industry stakeholders to determine just how much electricity demand is expected and how much may be filled by short-term measures such as the ILP. There are suggestions that another 1,000 MW of supply may be available from peaking plants if government simply lifts additional layers of price controls that were recently imposed on the Wholesale Electricity Supply Market.

Energy Secretary Carlos Jericho Petilla said that if power generators, suppliers and distributors cannot assure supply from April to June in 2015, the department will reaffirm its proposal for President Aquino to invoke Section 71 of the Electric Power Industry Reform Act. The provision allows for the granting of emergency powers to the President to address an imminent power crisis by contracting or even building power generation capacity, among other means.

Petilla said that a decision must be made by September on whether Section 71 will be invoked or not. Otherwise, it would be too late to address the power crisis next summer since it takes six months just to contract and take delivery of leased diesel-fueled power generators.

The sentiment among business and consumer groups are mixed. Some are open to a “limited” implementation of Section 71 while others are completely against it and still others are open to unhindered implementation. However, several parties have cautioned that this may pave the way for a reversal of market deregulation and could warp the power market to the point of turning off investors.