THE Department of Energy (DOE) on Thursday warned of a seven-week rotating power outage during summer of 2015 if Congress is not able to grant President Aquino special powers to address the supply deficiency in Luzon.
“Based on our latest projection, there will be red alert spread out during the summer months,” said Energy Secretary Carlos Jericho L. Petilla. A red alert means insufficiency of power supply.
But Petilla assured that there will be no spike in electricity rates because during a red alert, the prices at the Wholesale Electricity Spot Market (WESM)—should the Manila Electric Co. source additional power from the spot market—will not move upward.
“The market is suspended during red alert so the selling price at the WESM is averaged at a rolling period for the past 30 days. The price of electricity is not going to go up but there will be no power,” Petilla said.
The blackout will last anywhere from an hour to three hours. This scenario could happen during the last week of March, first two weeks of April, and in all weeks of May.
“The scenario could be different if there is yellow alert and no red alert,” Petilla said.
Yellow alert means that contingency reserves are below the minimum level set by the regulator but does not necessarily mean power outages or blackouts.
“During a yellow alert the prices could go up only if the WESM secondary price cap is lifted by the ERC [Energy Regulatory Commission]. Without the cap, it would all depend now on the behavior of market participants. But mind you, electricity prices do go up every summer with or without a power crisis because of high demand,” Petilla said.
The projected power-supply deficiency in Luzon is anywhere from 450 megawatts (MW) to 500 MW.
To avert a power crisis, the House and the Senate are urged to issue a joint resolution that will grant the President special powers to produce additional generating capacity.
One of the options being considered to solve the problem is for government to purchase or lease generating power facilities from the power producers but this could take five to six months for the Power Sector Assets and Liabilities and Management Corp. to finalize the contracts. “Until there is no joint resolution we can’t enter into any contracts. Funding is also a problem,” Petilla said.
Another option is for the government to rely on the Interruptible Load Program (ILP), where industries and businesses will run their gensets instead of getting power from the grid. But so far, those who have committed to join the ILP only total less than 200 MW in additional generation.
“By December it would be already too late to wait for the joint resolution. We have to make a calculative move as soon as possible. It would seem that we will have to maximize the ILP and convince all power plants to go online as soon as possible whether these are new or just a rehab,” Petilla said.