Shutdown of Napocor plants to result in higher power costs

State-owned National Power Corp. (Napocor) has no plans of shutting down its power plants, saying such a move will result in higher electricity rates.

Napocor OIC-president and chief executive officer Roland S. Quilala said the proposal to temporarily shut down its power plants to give way to independent power producers (IPPs) will also trigger system unreliability.

"We implement a dispatch order based on the following criteria: security, reliability and variable cost. The criteria that we use are based on universally-accepted standards and has been optimized according to our system configuration," he said.

Quilala said the merit dispatch order works by prioritizing power plants according to reliability and cost consideration.

The first priority, he said, is to ensure system security by providing enough generation and transmission capacity at any time. He said the dispatch order also ensures system reliability by providing enough spinning and standby reserves to cover for instances when one of the plants lined up suddenly trips.

The third criterion, Quilala said, is the variable cost of operating the power plants, with the cheapest to operate being given priority.

"Our dispatch order is reviewed every month. As part of our prudent management program, we make sure that we get the best mix of power plants that will best optimize our system configuration," he said.

In the case of the Manila Electric Co. (Meralco), which has been issuing calls for Napocor to shut down its power plants and let the former IPP plants’ run instead, Quilala said the country’s biggest power distributor must be willing to bring down the cost of power generated by its IPPs to the level of Napocor’s baseload plants and ensure that its plants will be running reliably at full capacity everytime.