President Benigno Aquino 3rd has ordered a deeper probe into the power crisis in Mindanao even as Energy officials are set to adopt immediate measures to ease the electricity shortage in the region.
Early this week, the President summoned officials of the Department of Energy (DOE) to find out what steps were being taken to solve the power crisis in the South.
Communications Secretary Herminio Coloma Jr. said the President called for Energy Secretary Jericho Petilla and other top officials of the DOE on Monday to prod them to widen their investigation to determine what caused the massive blackout that crippled several cities and other areas last month.
Coloma said Aquino wanted the DOE to “pursue continuing efforts to address the tight power supply situation that was highlighted by the Mindanao-wide power outage that occurred on February 27.”
“The President also directed the Department of Energy to coordinate with the Department of Science and Technology in monitoring the inquiry into the causes of the unexpected breakdown. According to the DOE, the tightness in the Mindanao power supply situation is expected to persist through the months of March, April, and May,” Coloma told reporters.
He said while the DOE is trying to determine the cause of the Mindanao blackout, the agency has identified three measures that will ease the tightness of power supply, which will, somehow, reduce the frequency of blackouts in the South.
“Secretary Petilla enumerated three concrete measures to address this situation and the corresponding additional capacity to be generated from each measure. First is the interruptible load program that is expected to generate about 93.71 megawatts [and].
. . second is the Interim Mindanao Electricity Market (IMEM), which is similar to the WESM [Wholesale Electricity Spot Market]—it is a transparency device by which the available supply in a particular grid is made open and public, so that those that would need additional supply may buy directly from offerors of power in that market, and this is expected to generate 124 megawatts,” Coloma said.
The third approach, he added, is establishing the Mindanao modular generator set program that is expected to generate 48 megawatts.
“This is the program by which distribution utilities may tap into their generator sets, instead of availing themselves of the system power supply, and they will be compensated for the cost differential through a formula already determined by the ERC [Energy regulatory Commission],” the official explained.
Coloma said with the additional 265 megawatts that will be generated from these three measures, the DOE hopes to be able to bridge the gap between demand and supply and lessen the frequency and duration of the rotating power outages.
Last week, Coloma announced that the power problem in the South may be solved in 2016 with the expected operation of new power plants that are expected to generate some 900 megawatts of electricity for the entire region.
The new power projects include the 200 MW coal-fired plant of the Alsons’ Group and the 300 MW Aboitiz-owned coal-fired plant, which will both come online by 2015 and the 400 MW coal-fired plant owned by Filinvest that will become operational in 2016.
“With 500 MW in 2015 and 400 MW in 2016, there will be an additional 900 MW to address the current power supply requirement, which is around 1,200 MW,” he said.
Latest estimates by the DOE placed the current supply in Mindanao at 1,064 MW while the estimated peak demand stood at 1,222 MW. This showed a shortfall of about 158 MW.
But on Thursday, Sen. Serge Osmeña 3rd sought the relief of Petilla, saying the power problem can be traced to the Energy’s chief’s “lack of focus.”
Osmeña said Petilla should be replaced by a dedicated individual “who is willing to devote his time to the energy sector and not politics.”
According to Osmeña, the power problem that led to the spike in electricity rate last year is the result of Petilla’s lack of focus because his attention is divided between his job as Energy secretary and politics.
“He’s a very intelligent, well-trained fellow but his focus is on politics,” the senator said. He added that he has urged Aquino to fire Petilla two months ago.
“That’s the way he [Aquino] solves things. He stays with people he appointed. He’s a very poor manager, we know that. He’s a good man but he’s an awful manager,” Osmeña said.
Osmeña said Petilla could have prevented the rate hike last year if he ordered the government’s Malaya plant to offer electricity at the WESM.
“I would have told Malaya, make your offer, that’s 600 megawatts. He [Petilla] did not,” he said.
He added that the Energy Regulatory Commission (ERC) also lacks experts on energy and is currently being ran mostly by lawyers.
“We need computer experts, electrical engineers, power experts there [ERC]. There are five members of the ERC and only one is a non-lawyer,” he added.
Osmena said the energy crisis being faced by the country is a product of poor managerial skills of the President and his appointees at the DOE.
“We would not be having these types of problems now if they were good managers,” the senator said.
Meanwhile, the Power Sector Assets and Liabilities Management (PSALM) Corp. believes that no rational conclusion would be reached even if the agency simulated the situation at the electricity spot market late last year.
The Manila Electric Co. (Meralco) has proposed conducting a simulation to come up with accurate rates for December and January 2013 when Malampaya was shut down.
“Simulations that aim to point the cause of the Meralco price hike during the 2013 Malampaya shutdown to the non-dispatch of Malaya Thermal Power Plant (TPP) in the WESM trading process are fundamentally flawed and extraordinarily misleading,” PSALM President and Chief Executive Officer Emmanuel Ledesma Jr. said.
Simulations are supposed to recreate a past situation in a logical manner, before the resulting conclusions can be considered reliable.
Hence, the assumptions underlying the simulations should be consistent with each other, predictable, and based on rational behavior.
Ledesma claimed that no consistent simulation can arise in using the P62 per kilowatt-hour (kWh) bids that were repeatedly offered for peak and off-peak hours despite sufficient notice that the Malaya plant was not being traded and dispatched in the WESM since January 2010.
“A reasonable simulation should in fact focus on the following issue: If the bids made were not P62/kWh, could the Meralco price spike have been avoided? What would have been the market clearing prices?
The obvious answer is ‘Yes.’ If only bids made were competitive, or close to the other bids being made in the WESM, the Meralco price spike could have been avoided and the market clearing prices could have been low,” he said.
“If the bids made were competitive, naturally the market clearing prices during the 2013 Malampaya shutdown would have been significantly reduced,” he added.
He, however, admitted that if the capacity of the Malaya plant had been traded and dispatched at WESM during that time, the market behavior of all WESM traders would most likely have changed.
With Reports From Jefferson Antiporda and Madelaine F. Miraflor