IMEM to start in September when brownouts are expected to be back

PASIG CITY (MindaNews/18 June) — The Interim Mindanao Electricity Market (IMEM) is on track to start its commercial operation in September when brownouts are expected to hit the island anew, officials said Tuesday.

Clares Jalocon, IMEM project manager, said the electricity market in Mindanao will start trial operations on August 26 with the commercial operation set on September 26, or a month-long trial period.

“We are expecting 150 to 200 megawatts (MW) to be made available to the IMEM once it starts operation as per advice by the DOE (Department of Energy),” he told reporters.

Power generating companies shall provide such supply for the interim electricity spot market in excess of their contracted volume with the distribution utilities, Jalocon added.

He noted that the supply expected to be initially sold at the IMEM does not include potential voluntary load facilities, or commercial companies with their own generator sets, which have a combined volume of 183 MW.

Jalocon said the DOE is also pushing the acquisition of diesel-fed modular generator sets by electric cooperatives as another immediate measure to address Mindanao’s power problem.

It would take three to four years to build a large power plant to solve the power problem of the island.

Romeo Montenegro, Mindanao Development Authority director for investment promotion and public affairs, said that brownouts will be back in parts of Mindanao starting August due to the scheduled preventive maintenance shutdown of power plants in the island.

“There will be supply shortage until December due to the scheduled preventive maintenance of the lone coal plant and oil-based and hydropower plants,” he said.

He said that the 208-MW Steag State Power Inc. is slated to shut down one of its two plants one after the other that would take away 104 MW at a time from the Mindanao grid.

Based on his presentation on Mindanao’s power situation, Montenegro said that the island currently gets most of its supplies from the Agus and Pulangi hydropower plants operated by the state-owned National Power Corp. at 710 MW and 445 MW at the most from diesel-fed sources when the Iligan Diesel Power Plant runs at full capacity in October.

Montenegro noted that there are immediate solutions to address the deficit in the coming months, among them the rehabilitation and uprating of the Agus and Pulangi plants by 50 to 100 MW, the Interruptible Load Program pushed by the DOE, the reopening of the 100-MW Iligan Diesel Power Plant, and the acquisition of modular generator sets by the distribution utilities.

He urged distribution utilities and the local government units not to be complacent when the area does not suffer from interruptions, noting they should take actions to ensure that the situation would be sustained in a long-term basis.

The pending start of the IMEM will come even as some issues are still being threshed out regarding the participation of the Agus and Pulangi hydropower plants in the electricity market.

“These are the issues on the billing and settlement. Although these are well-defined in the IMEM rules, there might be some problems that may crop up in the actual implementation. That is why the trial operation is very important,” said Thelma Ejercito, DOE power planning and development division chief.

Ejercito, also the DOE focal person for IMEM, said that the interim electricity market “shall augment the power supply in Mindanao and will provide correction to real-time power imbalances that will occur.”

She e-mailed MindaNews that participation in the IMEM shall be mandatory for all generation companies connected to the Mindanao grid and that the capacity shall be on top of the bilateral contracts of the generation companies and the distribution utilities in the island.

The Philippine Electricity Market Corporation, a non-stock, non-profit corporation, will operate the IMEM, which will hold office in Cagayan de Oro City.

According to its primer, IMEM “is a venue for the transparent and efficient utilization of all available capacities in the Mindanao grid to meet the supply deficiency.”

Unlike the Wholesale Electricity Spot Market (WESM) operating in Luzon and Visayas, the IMEM will be a day-ahead market and will address only the supply deficiency in the Mindanao grid.

“It intends to draw out all generation capacities including embedded generators in the grid to contribute to the supply in Mindanao. Further, it also intends to draw out voluntary load customers who are willing to curtail their load to lower the demand in the system,” the primer said.

By reasonably compensating embedded generators and voluntary load customers through a price determination methodology and cost recovery methodology approved by the Energy Regulatory Commission, it is envisioned that the supply and demand situation in Mindanao will improve until the entry of new capacities in Mindanao in 2015,” it added.

The IMEM will serve as a transition to the operation of WESM in Mindanao. (Bong S. Sarmiento/MindaNews)