GO RENEWABLE, GET TAX INCENTIVES
By Francis Allan L. Angelo
RESIDENTS and businesses will be entitled to real property taxes incentives if they use renewable energy sources, according to a proposed ordinance pending in the Iloilo City Council.
Eldrid Antiquiera, committee on environment chair and main proponent of the ordinance, said the measure seeks to promote the use of renewable energy sources in households and businesses.
Antiquiera said his proposed ordinance will complement the Renewable Energy Act which was enacted December 2008.
“While we still need traditional sources of energy such as diesel and coal-fired power plants, we should push for renewable sources in response to challenges posed by climate change,” Antiquiera said.
Antiquiera said the approval of the ordinance does not mean that the City Council is against the proposed coal-fired power plant in LaPaz district.
Antiquiera said he has conducted public hearings on the proposed ordinance and will deliver a committee report during their regular session Wednesday.
“I am positive that the measure will be passed this Wednesday. After the passage of the ordinance, the committee on ways and means will discuss the incentive scheme,” he added.
Antiquiera said renewable energy sources such as solar and wind technologies are still expensive “but users will save a lot on their power consumption in the long run aside from helping ease climate change.”
Antiquiera will also propose another ordinance for carbon dioxide emission offsetting schemes for traditional energy sources.
“We have been studying the provisions of the Kyoto Protocol, of which the Philippines is a signatory, on carbon dioxide emission in drafting the ordinance,” he added.
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ILOILO COMPANIES CAUTIOUS TOWARD
VISAYAS INTERIM POWER SUPPLY SCHEME
By Francis Allan L. Angelo
ILOILO CITY — Not a single company with power generator in this city has made a move to join the Visayas Supply Augmentation Auction, or VSAA, program, a market for trading of uncontracted capacity and interruptible energy loads to temporarily address the power supply shortage in Cebu, Negros and Panay.
Randy S. Pastolero of Panay Electric Co. Inc. (PECo), the sole power distributor in Iloilo City, said in an interview that the hesitation in joining VSAA stemmed from the program’s pricing mechanism and fines that will be incurred by participants who fail to deliver their committed capacities.
Those interested in participating in VSAA are required to coordinate with the distribution utilities covering their areas to arrange the time and day they will disconnect from the grid. “If establishments with embedded capacities are interested in VSAA, they could have coordinated with us,” said Mr. Pastolero.
“For example, Mall A will give up five megawatts it draws from PECo on a certain period of the day and sell it to another participant in the Visayas grid at P5 per kilowatt-hour. The mall is obliged to deliver that capacity by disconnecting from the grid and use [sic] its generators,” he explained.
“But if Mall A fails to deliver, the PEMC [Philippine Electricity Market Corp.] will look for replacement power from other participants. If the price of the replacement capacity is higher than the undelivered power, Mall A will pay the balance,” he added.
So far, only the management of SM City-Iloilo mall has coordinated with his office, “not to sell power but to secure their supply from PECo.”
Robert Ferrer, general manager of Sarabia Manor Hotel and Convention Center, said it would be more practical to draw power from PECo instead of using their generators.
“With the erratic movement in oil prices, we can save more if we continue getting power from the distribution utility where we enjoy flat power rates,” said Mr. Ferrer, who is also the former president of the Iloilo Hotels Restaurants and Resorts Association.
The Energy Regulatory Commission last Wednesday gave provisional authority to the Energy department, through PEMC, to proceed with listing qualified customers who could participate in VSAA.
With the order, the PEMC may now list 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.
Participants who have the capacity to provide their own electricity and thereby free up additional capacities in the Visayas grid, will be compensated for the interruption and for the power they will generate.
Mr. Pastolero said the power rates could still shoot up under the VSAA set up because pricing will depend on offers of participants.
“If you are not familiar with the VSAA system, you will face some risks. There are charges that participants will incur,” he said. (BusinessWorld, Friday, April 24, 2009 / http://www.bworld.com.ph/BW042409/content.php?id=052)
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NEW CAPACITIES TAGGED TO EASE
PANAY’S POWER SHORTAGE
ILOILO CITY — Panay needs new power plants to stabilize its energy supply and eliminate rotating brownouts, ranking executives of distribution utilities on the island said.
The island, which is composed of four provinces — Iloilo, Aklan, Antique and Capiz — currently suffers from rotating brownouts that last from one hour to nine hours daily.
The whole island of Panay has a peak demand of 210 megawatts. But supply amounts to only 128 MW, or a shortage of 82 MW, data from the National Grid Corporation of the Philippines (NGCP) showed.
The Visayas Supply Augmentation Auction (VSAA) program, which the Philippine
Electricity Market Corp. will launch on April 26, is just a palliative measure, said Wilfredo Billena, Iloilo Electric Cooperative (Ileco-1) general manager.
“The program is voluntary in nature and it is up to companies and establishments to join or not. There is no assurance that some firms will sacrifice their supply from the grid and use their embedded capacities,” Mr. Billena explained.
The program, which was designed as an interim solution to the power shortage not only in Panay but in Cebu and Negros as well, will trade uncontracted capacities from embedded generators and grid-connected power users that have interruptible load.
The program is also seen to pave for the implementation of the electricity spot market in the Visayas, which the Energy department had deferred due to the lack of transmission and generation facilities in the area.
Adrian Moncada, Global Business Power Corp. vice-president for commercial operations, said there are issues that must be addressed if VSAA is to become effective in Panay.
“Are we technically ready for the volatile rates under the VSAA? Can distribution companies and their end users coordinate their decisions to join or nominate their prices under VSAA?” Mr. Moncada said.
Randy Pastolero of Panay Electric Co. (Peco) said the VSAA might result in higher power rates as distribution utilities will be compelled to pass on to consumers the rates that businesses will charge when they join VSAA.
Mr. Billena said the only concrete solution they see is the construction of new power plants. “We need new capacities, whether coal plants or renewables. Our service area is suffering from rotating brownouts everyday because we don’t have enough supply,” he said.
Mr. Pastolero noted the rotating brownouts that hit Iloilo City last week after two engines of Panay Power Corp. (PPC) broke down.
He said Iloilo City has a peak demand of 75 MW. Peco, the sole distribution utility in this city, draws 61 MW from PPC and another 15 MW from the National Power Corp.
“We don’t have reserves anymore. Ideally, we need 23 MW reserve basing on industry standards,” Mr. Pastolero said.
PPC, which is operated by Metrobank unit Global Business Power Corp., is committed to supply 68MW to Iloilo City but its Engine No. 5 is under repair until this August. Global Business is putting up a 164-MW coal-fired power plant in LaPaz, Iloilo City.
Panay draws power from the Cebu- Negros-Panay grid, PPC and two power barges stationed in the city and province of Iloilo.
Power supply on the island was imperiled by the turnover of the Panay Diesel Power Plant (PDPP) in Iloilo to its new owner SPC Island Power Corp. (formerly Salcon Power).
Stakeholders raised fears of losing some 50 MW if SPC does not operate the power plant because of needed rehabilitation works and lack of supply agreement contracts with electric cooperatives.
The problem was remedied when the Department of Energy agreed to subsidize the operation of PDPP for five months until SPC has signed supply deals with Panay utilities.
Singapore-based SPC bought PDPP and the Bohol Diesel Power Plant for $5.7 million last year. The plants were turned over to SPC last March 25.
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