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Visayas interim power scheme lures IPPs

Vol. XXII, No. 205 [ BusinessWorld Online ]

Thursday, May 21, 2009 | MANILA, PHILIPPINES


ILOILO CITY — The Philippine Electricity Market Corp. (PEMC) has received applications from eight independent power producers (IPPs) and cooperatives to join the Visayas Supply Augmentation Auction (VSAA) program.

Data released by PEMC yesterday identified the applicants as East Asia Utilities Corp. (Cebu), SPC Island Power Corp. (Panay), Cebu Private Power Corp. (Cebu), Central Azucarera de San Antonio (Panay), Aklan Electric Cooperative, Antique Electric Cooperative, Iloilo Electric Cooperative 3 (all in Panay) and Negros Oriental II Electric Cooperative, Inc. (NORECO II).

SPC Island Power recently bought Panay Diesel Fired Power Plant (PDPP 2) in Dingle, Iloilo and Bohol Diesel Fired Power Plant for more than $5 million.

EAUC and NORECO II will undergo training on the scheme this week while the others, except Central Azucarera, have undergone training already. This training has had 17 participants, so far.

The VSAA, an interim solution to the tight power supply in the Visayas, is a scheme which involves trading through auction of uncontracted capacities from independent power producers and embedded generators and grid-connected users that have interruptible load.

PEMC data showed that a total of 68.1 megawatts in interruptible load of big Cebu firms, 19 MW from Negros power users and 20.8 MW from Panay users might be tapped for the scheme.

A total of 50 potential participants with a total embedded capacity of 162.68 MW have been listed under the VSAA.

The Energy Regulatory Commission (ERC) granted provisional authority last month to PEMC to register qualified customers willing to be disconnected from the grid at certain times, especially during peak hours of the day when there is electricity shortage, and generation companies, which have available or uncontracted capacity to generate power during these periods.

PEMC acting President Melinda L. Ocampo said in a statement yesterday that a successful launch of the VSAA should pave the way for a smooth transition to the much-delayed start of the Visayas Commercial Operations Program of the Wholesale Electricity Spot Market (WESM).

The same statement quoted Energy Secretary Angelo T. Reyes as noting that "Visayas power conditions have been limited for the past two years. Until additional expected capacities come in by 2010, the DoE [Department of Energy] has to find immediate ways to address the situation or residents of the region will endure one- to three-hour rotating brownouts on a daily basis."

The Energy department has repeatedly deferred the start of WESM operations in the Visayas due to inadequate capacity in both power generation and transmission facilities.

WESM Visayas has been on trial operations since 2005. — Francis Allan L. Angelo with J. B. F. Santos

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