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SHOULD
independent power producer administrators (IPPAs) be
required to procure their own fuel requirements? Yes,
say many influential sections in the power industry,
including a member of the Joint Congressional Power
Committee (JCPC).
The
Power Sector Asset and Liabilities Management Corp.
(PSALM) said it is looking at the option, considering
the various concerns raised by industry players during
the consultation process.
This
August, there will be a selection of IPPAs and the
proposal is up on the table at this time.
The
Electric Power Industry Reform Act (Epira) has required
the privatization of IPP contracts by assigning their
capacity to IPPAs to kick off open access in the
industry, where consumers, particularly those with a
consumption of 1-megawatt or higher, can choose their
power suppliers.
Rep.
Arnulfo P. Fuentebella of Camarines Sur, a member of the
JCPC, agrees with the proposal, noting that transferring
the task of procuring fuel to the IPPAs will allow them
to meet their contractual obligations or supply
agreements for the IPP contracts.
Under
the Epira, IPPAs are mandated to bid their IPP’s energy
output in the Wholesale Electricity Spot Market (WESM)
and to find other off-takers to optimize the plants’
running hours and net revenues.
“With
fuel problems encountered in some power plants operated
by National Power Corp. [Napocor], it is a prudent move
to shift fuel procurement to IPPAs,” added Fuentebella.
Citing
concerns of prospective IPPAs, Fuentebella said there is
a possibility the IPPAs would not be able to meet their
contractual obligations should the control of fuel
requirements remain with Napocor and fuel supply becomes
short.
Napocor
has admitted it is having problems with its fuel
procurement, arguing it must follow the rules of the
Government Procurement Policy Board; and doing that
precludes it from keeping up with the needs of the power
plants when they become urgent.
“Power-industry reforms cannot be completed without the
engagement of the IPPAs. It is only then that true
competition will reign in the industry,” said
Fuentebella.
In
consultations with PSALM, power-industry stakeholders
also recommended breaking up the portfolio of contracts
into a smaller range of 500 megawatts (MW) to 600 MW,
instead of 2,000 MW as initially packaged. |
