200-MW Shortfall Seen In Mindanao

The starvation of the province, Mindanao from electricity is in danger, suffering from another 200-megawatt (MW) shortfall for the succeeding years due to high demand and continues lacking of generation capacity.

It is said that the Department of Energy (DOE) is already banking on power charges and diesel-fired power plants to upsurge the available power in the region next year.

Energy Secretary, Jose Rene Almendras, mentioned that, “If we do not have additional generation in Mindanao by the dry season next year, we will have a shortage.”

“I am looking at least 100 MW, almost 200 MW. It also depends on the rainfall next year,” Almendras added.

Up to the present time, the hydroelectric power plant is responsible for 53 percent of the total power supply in Mindanao.

The Mindanao network, according to the National Grid Corporation of the Philippines, which is in need of at least an average of 1,300 megawatt (MW) during peak hours, lacked 50 MW to 300 MW, resulting in two to four hours of rotating blackouts in the first quarter.

“In Mindanao, the situation has significantly improved. What is being reported to us is that there are no more blackouts,” Almendras said.

As an update, last week, there was still no power outage in Mindanao which follows the completed repair of the 200 megawatt (MW) Pulangi IV hydropower plant in Bukidnon.

The DOE released a circular outlining effort last March needed from numerous government agencies and private firms to lessen power outages in Mindanao.

But, Almendras said that Mindanao is running on bare requirements and is without any emergency reserves. A failure in any of the power generation equipment will thus automatically result in a shortfall and blackouts.

Almendras said that the situation might worsen next year when demands increases and there is insufficient rainfall for the hydropower plants.

The DOE recommends that the resumption of operations and rehabilitation of the 100 megawatt (MW) Iligan diesel power plant and the rehabilitation and transfer of 120 megawatt (MW) of privately owned power barges, and the transfer to Mindanao of the 96 megawatt (MW) of power barges presently operated by National Power Corporation (NAPOCOR), in order to solve the power supply concerns.

The DOE is in talks with private firms for the transfer of several power barges, Almendras said.

The Commission on Audit (COA) review is ongoing regarding the Iligan plant issue.

“The COA has requested for some additional documents from the local government unit and from the bidder to substantiate their offer, their process and pricing,” Almendras said

The 100-MW plant, which was last operated in 2010, was sold to Alsons Consolidated Resources Inc. (ACR) subsidiary Conal Holdings Corporation after the local government acquired it due to tax delinquency.

However, the power plant also needs COA clearance before it can be sold to ACR and resume operations.

Almendras said that the DOE wants the plant to start operations within the year for it to reach the maximum capacity ahead of the dry season next year.

Lastly, DOE is reviewing its plans following the failed bidding of four 32-MW power barges of Napocor.

The bidding of the Power Sector Assets and Liabilities Management for the diesel-fired Power Barges 101-104 failed last week as only one of seven qualified bidders submitted an offer.

Under the bidding rules, winning firms should immediately transfer these power facilities to Mindanao and would have to stay there until 2014.

The DOE has been giving some warnings last 2010 with regards to Mindanao that it needs additional baseload generating capacity through private investor participation.

But the DOE said there were delays in securing permits from local government units.

For instance, Aboitiz Power Corporation, Sarangani Energy Corporation, and San Miguel Corporation are planning to put up coal-fired power plants in Mindanao but host communities opposed these plans due to environmental concerns.

Oil companies reduce diesel, kerosene prices

MANILA,Philippines – Pilipinas Shell, Petron, Chevron, and Seaoil Philippines yesterday led a price cut on diesel by 25 centavos per liter and kerosene by 75 centavos per liter.

Shell spokesman Roberto Kanapi said the price rollback, effective today, reflected the decline in international oil prices.

Domestic pump prices are expected to drop after an issuance of an executive order lowering the tariff on imported petroleum products from the ASEAN region.

The Department of Energy (DOE) estimated the EO 850 to result in a 70-centavo per liter reduction, but the oil firms have yet to implement the rollback.

Shell said this is just part of the weekly adjustment of prices relative to international oil market trend.

Energy Secretary Angelo Reyes said last week the impact of the EO should have been reflected this week.

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Firms warn of oil shortage

MANILA, Philippines—Oil companies said they would follow a Malacañang order to bring down fuel prices to their levels 12 days ago, but warned of a possible supply shortage.

“We will comply. We have no choice, but [the executive order] has serious implications not only to the supply of products in the country, but also to investments,” Edgar Chua, country chair of Shell companies in the Philippines, said at Monday’s meeting with officials of the Department of Energy (DoE).

Fer Martinez, president of Eastern Petroleum, said the industry’s fuel supply would be threatened because of the order.

“Already, Flying V Philippines and Total Philippines said they are canceling their importation [of petroleum products]. That’s dangerous, when people stop selling,” he said.


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VAT proceeds to be used in reducing electricity rates

WITH the implementation of Executive Order (EO) 796 or the Industry Competitive Fund (ICF), Energy Secretary Angelo Reyes said that starting this month, heavy power users will benefit from reduced electricity rates.

The EO was in response to huge power users’ clamor to ensure that electricity rates in the Philippines is as competitive as that of neighboring countries. The Philippines has one of the highest power rates in Southeast Asia.

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Petron, Shell set maintenance shutdowns

The maintenance shutdowns of the country’s two refineries may overlap sometime next month, but both Petron Corporation and Pilipinas Shell Petroleum Corporation assured that contingencies are in place to guarantee uninterrupted oil supply flow.

Shell confirmed its scheduled refinery shutdown (also technically called ‘downtime’) this February; while Petron indicated it may kick-off with its start-up process by then.

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Oil firms bare new price adjustments

Owing to regional oil price movements last week, the country’s oil firms trimmed down their diesel and kerosene prices by P0.50 per liter; while increasing the pump price of gasoline products starting 12:01 a.m. today (January 20).

The new round of adjustment was initiated by Pilipinas Shell Petroleum Corporation and immediately followed by PTT Philippines and Chevron Philippines; while Total Philippines kept pace with the competitors’ price movements at 6:00 a.m. Tuesday.

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