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Monday, June 02, 2003
Supplier tells ERC: Hike rates, we go on
By Jasmin G. Suma-oy
CEBU -- An impending power shortage on June 15 will be averted if the Energy Regulatory Commission (ERC) approves the petition of the National Power Corp. (Napocor) to increase its generation charge.
However, even if the impasse between the Cebu Private Power Corp. (CPPC) and the Visayan Electric Company (Veco) is resolved this month, Cebuanos will be facing a more serious power problem in December.
Energy Secretary Vincent Perez has warned of a crippling energy crisis in the Visayas beginning December, which could drag until the elections in May 2004.
Department of Energy (DOE) officials will be in Cebu today to discuss with local government unit (LGU) officials and other stakeholders in Cebu the looming power problem.
In an interview Sunday night, Energy Assistant Secretary Lasse Holopainen, however, urged the public to stay calm.
“We have been given seven months to fix it so there’s no reason to panic. We will meet with the Cebuanos so they could help look for solutions. If we work now, we have enough time to avoid brownouts,” he said.
The power demand of 689 megawatts (mw) now is expected to increase by five percent starting December.
When this happens, the power reserve will go down from the current 80 mw to only 20 mw.
Since the ideal “spinning reserve” (or the capacity of the biggest generation plant) is 51 mw, this situation would give rise to “rolling” brownouts.
“We need new sources of power supply,” Holopainen said.
Higher rates
Up ahead, aside from the prospect of scarce power, is the possibility of higher rates.
The ERC approved Napocor’s application for an increase in its generation rate to recover its deferred fuel and purchased power costs.
Starting in May, the ERC allowed Napocor to collect a generation rate of P2.21 per kwh, from only P2.07 per kwh.
However, the additional charge granted by ERC is only half of the original increase of P0.84 per kwh for the Visayas grid, that Napocor had asked for in the petition it filed last April 4.
Napocor filed another petition this month to further increase its generation rates to P2.83.
If the ERC grants this, the CPPC, whose price is pegged on Napocor’s rates, can automatically increase its selling price to Veco without amending their 15-year contract.
With a generation rate of P2.83 as basis, CPPC officials reportedly said that they can already sustain their operations and can still afford to sell power to Veco at a rate two percent lower than Napocor’s.
But while Cebuanos will no longer have to suffer brownouts, they might have to bear higher electric bills.
The additional generation charge that will be collected by Napocor as well as the additional amount CPPC will charge Veco will both be passed on to consumers.
Shortfall
During the joint congressional power commission meeting last Friday, Secretary Perez said there will be a power shortfall by December this year because the Leyte power grid can no longer meet the increasing electricity needs of the Visayas.
He said the task force that he created will look for foreign power companies to invest in the Visayas.
Holopainen told Sun.Star last night that if investors see attractive costs, this could expedite their investments in new generating plants.
Had the government addressed the problem four years ago, he said they could have found cheaper power plants.
To accelerate the construction of these facilities now, the public will have to spend more.
The power sources that could be secured faster are barges and generating plants that use diesel. These are also more expensive.
According to Holopainen, the government is trying to expedite the completion of the second phase of the Cebu-Leyte Interconnection that will increase the grid’s capacity from 300 mw to 400 mw. Sun.Star Cebu
(June 2, 2003 issue)
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