Power players endorse supply augmentation rules

CEBU, Philippines - Various electricity players yesterday pushed for the approval of Visayas Supply Augmentation Rules, which aims to ease the power shortage in the Visayas.

During the consultation among power stakeholders, Energy Secretary Angelo Reyes said the VSAA Rules will complement the pricing, cost allocation and cost recovery methodologies that will be approved by the Energy Regulatory Board.

Among the objectives of VSAA is to establish a venue for implementing interim solution to the deficit supply situation in Cebu, Negros and Panay as well as allow electric power industry participants in the affected regions to contribute to the easing of power supply deficit through demand side and supply side management.

According to Reyes, more power players are needed to have more power supply embedded flowing into the Cebu-Panay-Negros grid.

The VSAA is a demand-side management measure as it would allow power player participants to manage their loads as well as to run their self-generation facilities as a means to ease the supply deficit and augment supply in the region.

It will operate as a day-ahead market which would allow generators to sell their un-contracted capacity and customers to sell an interruptible portion of their load through an auction process.

Reyes said that the VSAA allows for an interim solution to the impending Visayas power supply problem, allowing a smoother transition to a market-based approach in trading electricity.

Further, he said the VSAA is expected to provide relief to electricity consumers in the Visayas region from rolling blackouts.

Last March 27, the DOE through the Philippine Electricity Market Corporation (PEMC), filed an application for approval of the pricing and cost recovery methodology and the structure and level of administration fees, with prayer for issuance of provisional authority for the VSAA before the ERC. PEMC is a non-profit, non-stock corporation and is authorized by DOE to represent it in the said application.

Reports had it that the present power supply situation in the region is already at a critical point as the current levels of electric power supply in the Visayas grid are inadequate to meet the demand in the region.

In its Power Development Plan showing the supply-demand outlook for 2006-2014, PEMC said the Visayas electricity demand requirements need to be addressed immediately to prevent power outages in the islands of Cebu, Negros and Panay.

The agency said consumers in these regions are already threatened by the looming power shortage during peak hours that could result to incidents of outages until sufficient new based-load capacity is put online.

In fact, it added that the systems operator has already declared the Visayas grid to be in a status of "red alert" indicating that the current available capacity is inadequate to meet both demand and reserve requirements. – Mitchelle L. Palaubsanon/WAB   (THE FREEMAN)