Govt to spend P450M to avoid 2015 power crisis, reimburse ILP participants

(Updated 4:39 p.m.) The government will spend an estimated P450 million to keep the supply situation in the Luzon grid from deteriorating into a crisis situation, and reimburse private companies running their own generators under the Interruptible Load Program (ILP) when reserves fall to critical levels next summer.

 

Energy Secretary Carlos Jericho Petilla told reporters the money will cover the cost of fuel, operations and maintenance for running the gensets. The amount may increase or decrease depending on the severity of outages in the Luzon grid beginning March 2015.

 

The Department of Energy (DOE) based its estimates on a formula established by the Energy Regulatory Commission (ERC) and the data on forced outages for 2014, Petilla said in an interview at the sidelines of the House Ways and Means committee hearing on the joint resolution giving President Benigno Aquino III special powers to deal with the projected power crisis next year.

 

“We singled out the days when brownouts may possibly occur based on 2014 outages. And then we computed the highest and lowest [forced outages] when ILP will be needed. That’s how we came up with the figure [of P450 million],” he said.

 

House Joint Resolution 21 authorizes the executive to establish additional generating capacity through ILP, which involves asking malls, factories and other businesses to use their own gensets when power supply is seen falling short of demand.

 

DOE expects to source around 800 megawatts from ILP to address the projected 1,004 MW shortage for certain weeks during the summer months of next year.

0.34 liters per kWh

 

Petilla described ILP as the least costly way of addressing the supply shortfall next year. He earlier supported leasing or purchasing modular gensets for P6 billion to P9 billion to address the looming crisis. 

 

"The cheapest form of reserve is ILP because there is no capacity fee," Petilla noted. "ILP participants have complained to us that they won’t be paid for the depreciation of their machines, only for their operation… That’s why they told us: We will help you only in times of crisis on a short-term basis. But we hope you’d reimburse us for operation and maintenance.” 

ERC’s ILP guidelines called for a maximum monthly reimbursement of P23,500 per month for the operations and maintenance of each private sector genset. 

 

The reimbursement for fuel cost is computed by multiplying the gensets’ deloaded capacity by 0.34 liters per kilowatt-hour (kWh).

 

“Instead of computing the actual fuel cost – since different machines have varying fuel efficiency levels and use different fuels – the ERC came up with .34 liters/kWh for the ILP. The cost had to be based on liters because fuel prices change,” Petilla said.

 

The government will likely tap the Malampaya fund to reimburse registered ILP participants. 

 

But Petilla said he will have to consult with the Department of Justice on the legal aspect of using the fund.



Meralco is still negotiating with for other private companies for 64.24 MW. – With Danessa O. Rivera/VS, GMA News