Friday, April 11, 2008 ‘Higher rates better than having no power’ - CCCI power group
BUSINESSES and industries in Cebu would rather pay an additional two to three centavos in power rates than experience power outages.
This was the sentiment expressed by Cebu Power Core Group chairman Carlos Co, after learning that the energy secretary has deferred the Visayas operation of the Wholesale Electricity Spot Market (WESM).
In a joint press statement of the Philippine Electricity Market Corp. (PEMC) and the Department of Energy (DOE), Energy Secretary Angelo Reyes said that although WESM Visayas is “technically prepared” to operate, it has inadequate power resources, both in transmission and the generation facilities.
WESM was supposed to start commercial operations in the Visayas on Feb. 26, which was later moved to March 26.
According to the study by Intelligent Energy Systems (IES), the tight reserve situation in the Visayas will give a possible rise to market power abuse.
IES, a consultancy firm based in Australia, was commissioned by the DOE, through a World Bank administered fund, to study the expansion of WESM in the Visayas.
Lasse Holopainen, PEMC president, admitted that the current power situation in the Visayas will lead to “volatile and relatively high spot prices.”
Co, for his part, agreed that the region’s power reserves are in critical condition but the core group, a body within the Cebu Chamber of Commerce and Industry (CCCI), is still rooting for the WESM operation.
“Otherwise, our other option is lack of power,” Co said. The power core group is also preparing a position paper that will be submitted to the energy department.
Turbine plants
In the worst case scenario, the National Power Corp. (Napocor) would be forced to run its turbine plants to address the crucial power situation, which will raise power rates, he said.
He clarified, though, that the increase in power rates will not be immediate. But, eventually, it will affect the consumers, especially when Napocor will apply for cash cost recovery from the Energy Regulatory Commission, he added.
Co said the CCCI will also push for the application of time of use (TOU), considering that most industries are willing to avail themselves of the scheme.
Under the TOU scheme, industries may have to shift production hours during off-peak periods, when cost of power and demand are lower.
Co said that under the TOU scheme, power during off-peak hours can cost as low as P3 per kilowatt and as much as P7 during peak hours.
Aside from the TOU scheme, Co said another option is load shedding.
He said shedding, which would involve rotational power outages, would only last for a maximum of two hours in a particular area. But he added that load shedding should be the last option.
Reyes, in the joint press statement, also encouraged distribution utilities “to maintain their supply contracts, which have fixed prices” to protect consumers from high spot prices due to low power supply.
Power shortage in the region is expected to be more evident by the third quarter of this year as earlier reported by the Visayan Electric Co. (Veco).
Veco spokesperson told Sun.Star Cebu the distribution utility firm will conform with DOE decision regarding WESM. She said Veco is ready to participate in the electricity market but it wait for DOE’s decision on the WESM Visayas operation. (DME)
