DOE expects add’l power capacity for Mindanao

MANILA, Philippines - The Department of Energy (DOE) expects at least 51 megawatts (MW) of additional capacity for Mindanao to be provided by the government’s modular generator sets program, Energy Secretary Carlos Jericho Petilla said over the weekend.

“We are taking into account 51-MW from about eight cooperatives,” Petilla said.

President Aquino issued in July EO 137 mandating the implementation of the Mindanao Modular Generator Sets program to help avert another critical power situation in the region.

Under the EO-mandated program, electric cooperatives would generate the capacities they need either via rental or acquisition of generator sets.

The Energy department earlier approved the use of roughly P4.5 billion from the Malampaya funds as loans to the Mindanao-based cooperatives to be administered by National Electrification Administration (NEA).

Electricity rates in Mindanao could go up to as much as P9.56 per kilowatt-hour from the current P6.20 per kWh rate in the island with the genset option.

Based on DOE computation, rental option would translate to an electricity rate of P9.56 per kWh. This is based on the rental fee of a genset of P1.4 million per MW and the estimated fuel cost of P41 per liter for diesel fuel.

On the other hand, the acquisition, to be financed commercially would translate to a new rate of P8.45 per kWh. This is estimated to cost P22 million per MW, with a two-year warranty.

The cheapest option is acquisition with financial assistance from NEA, would translate to an electricity rate of P8.09 per kWh.

From the trust fund, NEA would provide a loan for the genset with a proposed interest rate of six percent.

The loan would come from the proceeds of the Malampaya deep-water-to-gas project.

However, Petilla said that cooperatives can opt to avail of additional capacity from the Interim Mindanao Electricity Market (IMEM), a trading floor for electricity launched in Mindanao last week.

“This is complimentary. They can opt to use that or keep it. It’s their choice but they have to pay the amortization,” he said.

He said the IMEM is only an interim market.

“It can be changed if it doesn’t work for the majority. We can make adjustments but we will not adjust for the benefit only of one or two players. It has to be good for all,” he said.