Shortage of power supply in Luzon, Mindanao

Luzon may get lucky to experience no brownouts this dry season despite tight power supply that requires 300 megawatts more during day-time peak hours.

Energy (DoE) Sec. Jose Almendras told members of the business community led by the Philippine Chamber of Commerce and Industry (PCCI) that the Visayas, except for a few islands, has escaped the power crisis with the commissioning of three new coal-powered plants in Cebu and Panay. 

The new plants will be more than enough to meet peak demand and required reserve margins in the central Philippines group of islands.

The daily brownouts in Mindanao may persist this year as no new generating capacity is expected to be added.

“We have had a little luck as electricity demand in Luzon went down last December and in January because of the cold weather,” Almendras said.

The biggest island has very thin reserve and may need to import the excess capacity in the Visayas and activate the retired oil-fired generation plant in Navotas if the situation deteriorates.

“We are monitoring the performance of the power plants daily and checking if private sector owners of the sold National Power Corp. (Napocor) plants are upgrading the efficiency of aging plants” he explained.

“We realize that the DoE is not as powerless as earlier thought under the Electric Power Industry Reform Act.”

During the Philippine Business Conference last October, the organization of independent power producers assured the nation’s business leaders that a power crisis in Luzon can be prevented by rehabilitating the aging power plants they bought from the government.

Almendras said his department is concerned about Luzon because the only baseload power plant being built by GN Power will be ready only by 2015.

He was informed by the business leaders that some foreign and local investors are ready to build new plants but they could not hammer out long-term supply agreements with big end-users.

Because of this problem, most of the planned investments have been put on hold while the dependable capacity of power plants in Luzon is getting overtaken by the demand for electricity.

They suggested that DoE must start bidding out power plant projects the way it did to solve the power crisis in the early 1990s.

A recent Supreme Court decision on a power distribution issue in Cebu advanced the legal opinion that the EPIRA law did not strip the DoE of its powers when created by Congress in 1992.

The business leaders were unanimous in their assessment that the current DoE leadership is fully aware and understands the challenges confronting the industry and expressed strong confidence in the capacity of the DoE to solve the problem.

The DoE committed to undertake continuing dialogue with the business leaders as well as other private sector groups to ensure timely and responsive action to the industry’s issues.