THE government may grant the appeal of power firm STEAG AG for a new power supply agreement in view of its proposed capacity expansion of up to 100 megawatts to 50 megawatts for the 210-megawatt Mindanao Coal power plant.     

Energy Secretary Raphael P.M. Lotilla told reporters the government could cite Section 71 of the Electric Power Industry Reform Act (Epira) that requires declaration by the President of a crisis, particularly for the unenergized areas of Mindanao.    

That provision allows the Congress to authorize, through a joint resolution, the establishment of additional generating capacity under such terms and conditions it may lay out and upon the determination by the President of the Philippines of an imminent power shortage.               

Lotilla said the Epira states that “a determination of an imminent crisis” may require President Arroyo to ask Congress for a resolution that will provide the legal framework for investments for new capacity.  

“The President does not even need a crisis to occur, but just an indication that additional supply is badly needed,” said Lotilla.            

He said Mindanao’s situation should be addressed separately from the other grids, since the privatization of Agus hydropower complex, which provides power supply to the island-region, will not push through as scheduled until 2011.

Lotilla reiterated that there is no need to revise the Epira just to find ways to help investors invest or expand generating capacities in certain areas.      

Lanao del Norte Rep. Alipio Cirilo V. Badelles, , also the Joint Congressional Power Commission cochairman, said the government’s inability to enter into new power purchase agreements (PPAs) may already merit a review at this point, considering the concerns of interested investors for a market they could sell whatever capacity expansion they will be undertaking.        

“It’s almost impossible for investors to come in and invest new capital without a supply contract, so we want to take a second look at that. And the situation is different now from the time when the Epira was still being formulated and the National Power Corp. (Napocor) still In the red,” said Badelles.     

Other foreign investors earlier expressed unwillingness to invest anew in the Philippines, saying their planned capacity upgrade will not be backed by long-term contracts.  

Investors stressed that no lender will finance new or expansion power projects without a definite off-takers.

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THE  largest power distributor Manila Electric Co. (Meralco) is currently considering proposals to enter into a new 100-megawatt supply contract from the 600-megawatt coal power plant that GN Power Ltd. Co. is putting up.    

GN Power is the first retail electricity supplier (RES) approved and licensed by the Energy Regulatory Commission (ERC).   

“We are considering GN Power’s offer for its 100 megawatts,” said Meralco chairman and chief executive Manuel Lopez in a press conference.          

Construction is set to start this year for GN Power’s facility, to be located in Bataan, and scheduled for commercial operation by 2010. It is expected to operate under an open access environment.         

GN Power’s commercial operation timeline is deemed as a critical period for Luzon, as its power supply and demand is projected to reach its peak.    

GNPower is a limited partnership of Power Partners Ltd. Co. and PMR Holding Corp., which are duly registered with the Securities and Exchange Commission.   

The offer ensures Meralco customers, primarily residential customers, of a reliable supply of electricity, and that they will be serviced continuously by franchised distribution utilities once the Open Access is in place.             

The Open access policy will allow qualified customers to choose their power suppliers. Customers, on the other hand, must have an initial demand requirement of one megawatt or higher.            

Lopez said Meralco sees the project as a viable proposition, pointing out that majority of GN Power’s planned capacity is already covered by supply contracts with various off-takers or buyers of generated electricity.       

“Meralco is just waiting for the ERC’s final decision on the incentives for new power contracts that distribution utilities may enter into,” said Lopez.   

The rules set forth that retail electricity suppliers shall be qualified on the basis of both their financial and technical capabilities to deliver service to end-consumers, and that it must have an outstanding credit standards to demonstrate that it has the financial strength to engage in such endeavor.

Section 29 of the Electric Power Industry Reform Act mandates the ERC to issue licenses to electricity suppliers that will operate in the contestable market, or the segment of end-users that will have a choice of electricity supplier as may be determined by the ERC, consistent with the provisions of the law.

The said provision also allows any person, natural or judicial, who is registered with the Department of Trade and Industry (DTI), with the SEC, and/or with the Cooperative Development Authority (CDA), to apply as a retail electricity supplier with the ERC to engage in the retail electricity supply business, provided its has the necessary financial, technical and managerial capabilities to effectively undertake the business.

CEBU—Member countries of the Association of Southeast Asian Nations (Asean) signed on Sunday a framework agreement with China on trade in services (TIS), a key move toward a future free-trade agreement (FTA) between Beijing and the regional bloc.

CEBU CITY—Southeast Asian leaders have expressed their “continuing concern” over the situation in Iraq and the Middle East, and have called for a dialogue between the contending parties in Iraq to pave the way for national reconciliation in the war-torn country.

CEBU CITY—President Arroyo said on Sunday that the 12th Asean Summit has broken “new ground” and has brought the regional grouping closer to its envisioned “formidable bloc” with the endorsement of a blueprint for an updated charter, and fresh pacts on security, migrant workers and trade.

CEBU CITY—In what is considered a “very major step” by one of the world’s fastest-growing economies, China on Sunday agreed to sign a Memorandum of Understanding with the Asean on an Asean-China center on trade, investment and tourism promotion.

The economic managers said on Friday the country’s macroeconomic underpinnings this year should prove significantly stronger than originally assumed, one where local output or the gross domestic product were to quicken to as high as 6.1 percent from the  expectation of just 5.8 percent.

ANOTHER apparent money-making scheme by telecommunications companies already raking in multibilllion net profits each year has consumers up in arms, and a consumer advocacy group has asked the National Telecommunications Commission to immediately stop two of these telecom giants from imposing expiry dates on free text allocations and free airtime loads, which would begin Monday.

THE government may grant the appeal of power firm STEAG AG for a new power supply agreement in view of its proposed capacity expansion of up to 100 megawatts to 50 megawatts for the 210-megawatt Mindanao Coal power plant.

HONG KONG—China’s leading pharmaceutical giant is set for a battle with multinational companies (MNCs) as it opens its branch in the Philippines next month, banking on the growing popularity of Chinese medicine and alternative treatments.