Customers of the Manila Electric Co. (Meralco) may have to pay an additional 7.5 centavos per kilowatt-hour (kWh) in monthly generation charge so the utility firm can compensate Interruptible Load Program (ILP) participants for the power-generation capacity that they are willing to deload.
Meralco needs to compensate its ILP participants for the expenses, particularly fuel, they will incur when they operate their own generator sets instead of sourcing power from the grid.
The utility firm estimates a P200-million payment for every 300 megawatts (MW) of accumulated committed interruptible load (CIL) capacity from the ILP participants. Meralco, in turn, would have to pass this on to its customers.
“It’s a 7.5 centavos/kWh rate impact on the gen charge per 300 MW deloaded for five hours a day on all weekdays for one month. Thus, if only 200 MW is deloaded, then the rate impact would be around 5 centavos/kWh,” said Meralco Head for Utility Economics Lawrence Fernandez on Thursday.
Meralco has signed up a total of 143 MW of CIL capacity from various ILP participants. The utility firm continues to approach customers to invite additional participants. The growing number of CIL capacity would help the government address the power shortage anticipated in the summer months of next year.
With the ILP, power supply from the grid that will not be consumed by participating customers will be available for use by other customers within the franchise area. Through this, the aggregate demand for power from the system will be reduced to a more manageable level, helping ensure the availability of supply during the season.
ILP remains the viable solution to help solve the power-supply deficiency anticipated in the summer months of next year after the Senate, during a technical working group (TWG) meeting on Thursday, told Energy Secretary Carlos Jericho L. Petilla that Congress is not keen on authorizing President Aquino the special powers he seeks.
During the meeting, Senate Committee on Energy Chairman Sen. Sergio Osmeña III said it was the sentiment of most lawmakers that the government should distance itself from the power-generating sector, adding this is best left to the private sector to handle.
The President, if granted special powers, can invoke Section 71 of the Electric Power Industry Reform Act (Epira).
Epira prohibits the government from putting up power plants. However, Section 71 of the said law states that the President, upon determination of an imminent shortage of supply of electricity, may ask for Congress for authority, through a joint resolution, to establish additional generating capacity under such terms and conditions.
When sought for comment, Petilla said his office will continue to work on the ILP by soliciting more participants. The Department of Energy (DOE) has so far gathered a firm commitment for a total of 101 MW of ILP. An additional 171 MW may be added until February, he said.
“We will continue what we are doing with or without special powers. We are actually working on ILP and IPPs [independent power producers] that do not have contracts. We are working on all of these,” he said.
The agency was originally looking for 700 MW in additional power- generating capacity, of which 100 MW is meant to cover the decreased supply. Taking into account a “mild El Niño” scenario, the additional projected capacity requirement for Luzon will be adjusted to 800 MW and as much as 1,200 MW in “extreme El Niño” case.
However, since the 150-MW Calaca coal-fired power plant expansion project will fail to meet its commercial launch in March next year, the anticipated shortage will increase to 900 MW.
According to Petilla, the 150-MW Calaca power plant is the biggest power plant, in terms of capacity, which is supposed to come online by summer of 2015.
The DOE will also compensate the ILP participants that will sign up with the agency. The government will reimburse them of their fuel expenses and extend reasonable recovery. Other terms and conditions for the optimal operation and pricing of the ILP are being studied.