Electricity market needed for expected surplus power in Mindanao

DAVAO CITY (MindaNews/25 October) – Mindanao needs to have an electricity market next year to address the looming power oversupply next year due to the entry of new coal plants before the end of this year.

Mindanao Development Authority (MinDA) officer-in-charge Glenn Reston told reporters during the Energy Smart Mindanao 2016 at the Park Inn by Radisson Davao Tuesday that the island is expected to have a surplus of over 1,000 megawatts.

The surplus will come from Filinvest Development Corp.’s 405-MW coal plant, San Miguel Corporation’s 600-MW coal plant, Cagayan Electric Power and Light Company Inc.’s embedded capacity of 155 MW, and Aboitiz Power’s Manolo Fortich Hydropower Project with 68 MW in Bukidnon, he said.

He said SMC’s two-unit plant has a capacity of 300 MW but expandable to 600 MW.

“With the surplus, even with two shutdowns, we can handle it,” he assured.

Reston said the electricity market will allow power companies in Mindanao to reallocate the surplus to areas needing more power.

“We are entering a regime of surplus capacity. We need to have the market,” he emphasized.

He said they have yet to discuss the dispatch protocol in the upcoming principals’ meeting in November in Manila where Energy Secretary Alfonso Cusi and MinDA Secretary Abul Khayr Alonto will meet with the top executives of companies in the country.

The dispatch protocol will serve as guide to address the possible issues between power generators and distributors when the electricity market would start operation.

“We want IMEM (Interim Mindanao Electricity Market) to be practiced. But there’s not yet a dispatch protocol. Without it, there would be some capacity that will not be paid,” he said.

At present, he said they are choosing between the Power Electricity Market Corporation, the operator of Wholesale Electricity Spot Market and the Independent Market Operator for Mindanao, being pushed by the Association of Mindanao Rural Electric Cooperatives, Inc. to manage the electricity market.

PEMC handled the IMEM before it was suspended in February 2014 due to “system collapse in Mindanao” and the need to “resolve operational and commercial issues and concerns.”

In his presentation, Reston said that MinDA supports the creation of a Mindanao Power Corporation, a government-owned power corporation that will handle the Agus-Pulangui hydropower complex that supplies Mindanao half of its power needs.

He said that relegating the management of Agus-Pulangui from Power Sector Assets and Liabilities Management to Minpocor will ease the adverse impact of increase in electricity rates brought about by volatile supply or world market prices.

“The prices of coal are pegged at the market price of oil,” he said.

He added the electricity rates will be more affordable as “opposed to rates if the plants are fully privatized,” earnings will be given to Mindanao, and ownership of the hydropower plant will ensure that market dominance of the power plants will not be transferred to the private sector. (Antonio L. Colina IV/MindaNews)