MANILA, Philippines - Electric cooperatives in Mindanao will be allowed to put power generators by the end of the year after President Aquino signed Executive Order 137 or the Mindanao Modular Generator Sets (gensets) program.
Under the EO, the Department of Budget and Management will release P4.5 billion for the program to be sourced from the Malampaya funds.
Under the program, a loan facility may be extended to participating electric cooperatives for the acquisition of modular power generators.
This is deemed as the immediate short-term solution for the ongoing power problem in the island, which is suffering from rotating brownouts that last up to 10 hours a day, depending on the area.
The generators will help electric cooperatives address the power shortage in the region, according to the EO signed on July 12 and published yesterday.
The Energy department earlier approved the use of P4.5 billion from the Malampaya funds as loans to the Mindanao-based cooperatives to be administered by National Electrification Administration (NEA).
One cooperative needs one to two megawatts (MWs) in additional supply, which they could get from the generators. They would need at least P1.4 million for the rental fee.
Data from NEA showed some 15 electric cooperatives could add at least 93.5 MW in additional capacity.
Mindanao-based electric cooperatives source part of their power requirements from the Angus-Pulangi hydropower plant but this is not enough.
The Energy department has said that the Mindanao grid would need additional 38 MW this year.
NEA has been trying to help electric cooperatives improve their financial viability.
Energy Secretary Carlos Jericho Petilla, however, said that the long-term solution is to have new power plants, but these are expected to come in only in 2015.
Furthermore, electricity rates in Mindanao could go up to as much as P9.56 per kilowatt-hour from the current rate of P6.20 kwh 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.