8 power firms, coops joining VSAA program

By Francis Allan L. Angelo

 

EIGHT power generators and electric cooperatives in Visayas region have applied with the Philippine Electricity Market Corp. (PEMC) to join the Visayas Supply Augmentation Auction (VSAA) program.

 

Latest updates from PEMC show the applicants so far are East Asia Utilities Corp. (Cebu), SPC Island Power Corporation (Panay), Cebu Private Power Corp. (Cebu), Central Azucarera de San Antonio (Panay), Aklan Electric Cooperative, Inc., Antique Electric Cooperative, Inc., Iloilo III Electric Cooperative, Inc. (all in Panay) and Negros Oriental II Electric Cooperative, Inc.

 

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

 

VSAA is a voluntary program which allows distribution utilities and large consumers of electricity to boost their supply deficit through transparent and competitive means.

 

The VSAA hopes to address the growing concern for the tight power supply in the Visayas, specifically in Cebu, Negros and Panay.

 

The program offers a number of options for distribution utilities for the procurement of power. This includes purchase of supply deficit from another supplier through the VSAA apart from their existing bilateral contracts as well as voluntary load curtailment.

 

The Energy Regulatory Commission (ERC) granted provisional authority to PEMC on April 22, 2009 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.

 

Generation companies, which have available or uncontracted capacity to generate power during these periods, can also join the program.

 

Under the proposed VSAA, these qualified customers willing to be disconnected from the grid (or what is known as interruptible load) and these generation companies that will be asked to run their plants during periods of shortage (thereby augmenting the supply of electricity for the system) will be paid for being interrupted (for the interruptible load) or for the power they will generate (for the generation companies).

 

PEMC listed 60 potential participants in VSAA with a total embedded capacity 162.68 megawatts.

 

A total of 19 potential players participated in the series of VSAA trainings conducted by PEMC since April.

 

Melinda L. Ocampo, PEMC acting president, said the successful launch of the VSAA will allow for a smooth transition to the operation of the Visayas Commercial Operations Program of the Wholesale Electricity Spot Market (WESM).

 

WESM is expected to encourage possible investors to venture in the Visayas power industry, thus bringing in the competition necessary for the region.

 

Energy Secretary Angelo T. Reyes said the Department of Energy (DOE) and PEMC are looking forward to the immediate implementation of the VSAA as soon as it is approved by the Energy Regulatory Commission (ERC).

 

“Visayas power conditions have been limited for the past two years. Until additional expected capacities come in by 2010, the DOE 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,” Reyes said.

 

Engr. Randy Pastolero, operations manager of Panay Electric Co. (PECO), said businesses with embedded power capacities in Iloilo City have yet to show interest in joining VSAA because of the pricing mechanism and fines that will be incurred by participants who cannot deliver their committed capacities.

 

Interested participants in VSAA are required to coordinate with PECo, the sole power distributor in Iloilo City, to arrange the time and day they will disconnect from the grid.