Philippines: Proposals for the Electric Power Industry in Mindanao

Philippines: Proposals for the Electric Power Industry in Mindanao

The Association of Mindanao Rural Electric Cooperatives, Inc. (AMRECO) and
the AMRECO Power Supply Aggregation Group Corporation (AMRECO PSAGCORP) will
be holding a workshop on February 17, 2017 in Cagayan de Oro City on the
"Drafting of Rules for WESM in Mindanao".

The invitation sent by AMRECO President Sergio Dagooc and AMRECO PSAGCORP
President Adelmo Laput states: "The workshop will serve as the Mindanao
Electric Cooperatives' key initiative in support to the present
Administration's quest in establishing affordable and sustainable electric
services in Mindanao. The AMRECO is consistent in strongly reiterating its
proposal for the establishment of an independent market in Mindanao that
should be separate from the WESM administered by PEMC and should only be
managed by the stakeholders and market participants in Mindanao."

The workshop is somewhat misnamed in its reference to a WESM in Mindanao,
and should be more accurately named as "Drafting of Rules for the Economic
Dispatch of Electric Power Plants in Mindanao".

But President Dagooc and President Laput make it clear in their invitation
that the long-term objective for electric cooperatives is the establishment
of a WESM in Mindanao that is not administered by the Philippine Electricity
Market Corporation, but by an organization that would be accountable to the
electric power industry players in Mindanao.

There is no need to formally change the title of the workshop as long as it
is understood that the reference is to the establishment of a WESM that
benefits the people of Mindanao. There is no intention to establish in
Mindanao a WESM that is administered by the PEMC, which is now doing very
badly in its administration of the Philippine WESM in the Luzon-Visayas
grid.

In holding the workshop, the officers of electric cooperatives in Mindanao
are taking the initiative to address the problems in the electric power
industry that result from: (a) construction of coal power plants with total
capacities in excess of the baseload requirements of consumers in Mindanao
over the next several years; and (b) overcontracting of baseload power
supplies on the part of many of the electric cooperatives.

These problems could be addressed by ensuring that the dispatching of power
plants connected to the Mindanao Grid (now being done by the National Grid
Corporation of the Philippines as System Operator) will be carried out in
such a manner as to result in the least cost of power supply for consumers.

The AMRECO workshop is for the purpose of developing the rules that would
govern system operations of the Mindanao grid and also govern the behavior
of distribution utility companies and large power consumers that are
connected directly to the grid. In effect, the electric cooperatives hope to
develop rules that would govern all stakeholders in the electric power
industry in Mindanao.

The proposals that would be formulated in the AMRECO workshop will have to
be taken up and agreed upon in another conference to be attended by all
stakeholders in the Mindanao EPI - the electric cooperatives, the
investor-owned distribution utilities, consumers directly connected to the
Mindanao grid, power consumer groups, the NGCP, and representative from the
DOE, NEA, ERC, Mindanao Development Authority, and other government agencies
dealing with the Mindanao electric power industry.

Following are some proposals and issues that can be taken up during the
AMRECO workshop and considered by other stakeholders preparatory to the
holding of a conference for all stakeholders to agree on the rules governing
system operations of the Mindanao grid.

1. Dispatching of power plants by NGCP should be done with the primary
objective of least-cost power supply (based on duly-approved rates for
existing power supply agreements) while ensuring the integrity and security
of the Mindanao grid.

2. Appropriate penalties should be imposed on distribution utilities and
directly-connected consumers who draw power supply from the grid in excess
of their contracted power supplies.

3. The NGCP should develop a plan and implement measures that would
eliminate possible congestion in the grid where it is economically feasible
to do so by uprating of power lines and equipment on the grid.

4. The hydroelectric power plants on the Agus River should be operated in
accordance with the Rule Curve for Lake Lanao to ensure that the minimum
level of Lake Lanao (699.15 Meters above Sea Level) will not be breached at
the projected peak monthly load in the period from April to June of every
year.

5. Distribution utility companies should submit petitions to the ERC to pass
on to their consumers any of the costs that would result from the
implementation of the rules or measures that are agreed upon by the
stakeholders.

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Link to Original Article:
http://www.kagay-an.com/proposals-electric-power-industry-mindanaoaddressing
-problem-overcontracting-power-supplies-alleged-overcapacity-coal-fired-powe
r-plants/

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com