POWER distribution utility firm Visayan Electric is calling for more of its commercial and industrial customers to enrol in the Interruptible Load Program (ILP) to lessen the impact of possible power shortages on the Visayas Grid.
ILP is a voluntary, demand-side management program where business customers of a distribution utility with usage of at least one megawatt per day, sign an agreement that they will run their own generator sets for particular hours in a day when the power supply in the grid will not be enough for the power demand.
Increasing the ILP capacity ensures a reduced duration and frequency of rotating brownouts should there be a power shortage.
“We need to increase our ILP capacity now that there are frequent yellow and red alerts from the National Grid Corp. of the Philippines (NGCP). Temperatures are very high, and as much as possible, we want to avoid having to implement manual load dropping or at least lessen the duration and frequency so that our customers will not be inconvenienced,” said Visayan Electric president and chief operating officer Raul Lucero in a statement.
As of 2023, industrial and commercial firms made up 36.86 percent and 18.10 percent of Visayan Electric’s energy sales, respectively. Residential had energy sales share of 43.87 percent.
The NGCP has been issuing yellow and red alerts in the Visayas Grid due to supply concerns following the forced outage, derated capacities of several power plants in the grid, as well as the increase in demand because of the extreme heat that the country is experiencing.
Red alert
On Wednesday, April 24, 2024, the NGCP placed the Visayas Grid on red and yellow alerts.
Red alerts were raised from noon to 5 p.m. and 6 to 8 p.m., and yellow alerts from 10 a.m. to noon, 5 to 6 p.m. and 8 to 9 p.m. due to a thin power supply.
Wednesday’s peak demand was projected at 2,525 megawatts (MW) with an available capacity of 2,462 MW.
In a statement, NGCP said one power plant was on forced outage since 2022, two plants since 2023, two plants between January and March 2024, and 15 plants since April 2024. Eight plants are running on derated capacities, for a total of 621.6 MW unavailable to the grid.
The transmission firm added that the reduced capacity exported by Mindanao to the Visayas aggravated the power situation in the Visayas.
Red alerts are issued when the power supply is insufficient to meet consumer demand and the transmission grid’s regulating requirement. Yellow alerts are issued when the operating margin is insufficient to meet the transmission grid’s contingency requirement.
Business response
Cebu Chamber of Commerce and Industry president Jay Yuvallos echoed the Visayan Electric’s call for large power consumers to participate in the ILP.
“We are hoping that this will prevent power interruptions that will have serious effects on productivity and or production of our micro, small and medium enterprises,” said Yuvallos.
Mark Anthony Ynoc, president of the Mandaue Chamber of Commerce and Industry (MCCI), said MCCI member companies are willing to participate in the ILP if requested “since this program is a needed palliative to the current challenges we are facing and it will mitigate the negative effects, especially to the industrial sector.”
“We just need to be educated more on the mechanics and how we can fully take advantage of the whole arrangement,” Ynoc said.
Entrepreneur Steven Yu said while the cost of running their own generator sets will vary depending on the size and type of the units, it is generally similar to the costs of buying power from Visayan Electric.
The cost of running a generator set also depends on fuel costs.
“However, the participants of the ILP are willing to do it for the greater good of the community. From a macro scale, avoiding blackouts augurs well for the general economy and is advantageous to businesses,” he said.
ILP participants
In May 2023, four major industry operators in the Visayan Electric franchise area signed up for an ILP partnership, namely SM Prime Holdings, Radisson Blu Hotel Cebu, J. King and Sons Company Inc. (Club Ultima) and Lucky Group Management and Development Corp (Gaisano Country Mall).
The strategic partnership boosted the ILP capacity of Visayan Electric to 23 MW.
Visayan Electric last implemented the ILP in 2015 when there was a power supply concern after a generating plant’s emergency shutdown. There were 28 business customers who enrolled with the ILP at that time, with a total 68 MW in power requirement.
Lucero said previous ILP activations had averted brownouts from affecting hundreds of thousands of Cebu households.
Companies that participate in the ILP will be compensated for their actual variable charges incurred (i.e., fuel cost) plus a certain margin, as will be agreed upon by the participating company and the distribution utility.
Business customers interested in enrolling may get in touch with their respective key account managers or with Visayan Electric through info@visayanelectric.com. / KOC