Time was when a power plant in your neighborhood guaranteed a steady, reliable supply of electricity for your home. Not anymore.
Minergy Expansion 3-6.3 MW Diesel Power Plant
Under the ongoing regime of privatization of the country’s remaining power generation and transmission assets, the time when there was only one supplier of electricity for the whole country has long gone so don’t celebrate just yet when a power plant goes up in your community.
During the latest Media Forum hosted by the National Economic & Development Authority Region X office (NEDA-X) last December 16, the need for a change in the definition of an area’s energy security became evident following the presentation of the region’s installed and dependable capacities.
According to figures culled from local distribution utilities, the Dept of Energy and the Power Sector Asset & Liabilities Management Corp. (PSALM), Region 10’s total installed capacity increased by 98 megawatts (MW) or a 9.17 % increase, from 1,052.8MW during the 3rd quarter of 2014 to 1,166.4MW for the same period this year. This was attributed to the operationalization of embedded power plants of DUs in Iligan City and Panaon, Misamis Occidental.
The installed capacity also includes embedded generators of the Cagayan Electric Power and Light Co., Iligan Light and Power Co (ILPI), FIBECO, MOELCI and MORESCO II that make up 18% of the total. Embedded generators are operated by generation companies (gencos) owned by affiliates of DUs which supply power exclusively within the franchise areas of their mother companies.
Kirahon Two Energy Corp. 10MW solar Farm in VIllanueva, Misamis Oriental (courtesy of CDO.Dev.Com)
It was similarly reported during the same forum that Region 10’s dependable capacity (or the electricity that the generators actually deliver to its customers) declined by 103MW or 10.31% for the third quarter of 2015 compared to the same period in 2014. This was attributed to the onset of the El Niño phenomenon which significantly affected the water levels in the Agus-Pulangi power complexes which still supply over 50% of Mindanao’s energy to date. The dependable capacity of power plants in Region 10 reportedly makes up 70% of the total supply for Mindanao as of September 2015.
Lest residents, and more importantly, decision makers make assumptions based on the traditional definition of energy security, they should be informed and educated on the changes being undertaken in the power industry, especially given the ongoing privatization of PSALM/NAPOCOR of the country’s remaining power generation and transmission assets.
It would be misleading to say the region has this or that dependable capacity without clarifying where the power generated by a particular power plant ultimately goes. For instance, the FDC Misamis coal-fired power plant in Villanueva is designed to produce 405MW of electricity but that doesn’t mean that its host communities, even Villanueva or Misamis Oriental can claim it is “energy secure” because FDC Misamis is a merchant plant and will only supply power to DUs and industries which have a power supply contract with them approved by the Energy Regulatory Commission (ERC).
FDC Misamis Corp. Coal Fired Power Plant under construction at the Phividec Industrial Estate, Villanueva, Misamis Oriental
Another case is the 110MW coal fired power plant of Minergy Coal under construction in Balingasag, Misamis Oriental. Since it is an embedded power plant of Cepalco, the host community will not even receive one megawatt of power since it is outside the franchise area of Cepalco.
Eventually, when the Agus-Pulangi hydroelectric power plants are ultimately privatized, even if ownership remains with the government, the winning bidder through its Independent Power Producer Administrator (IPPA) contract will be the one to determine who it would allocate the power to through a power supply agreement (PSA) approved by the ERC.
So don’t go celebrating the end of these pesky brownouts in your neighborhood yet just because there’s a coal-fired, diesel, solar, hydro or bio-mass power plant being constructed in your community. It would be well for residents and community leaders to first ask the power plant owners just where they are planning to sell all that power to.
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