If  Malacañang’s quick fix solution for the power crisis in Mindanao pushes through, consumers could pay as much as three times what they’re now paying for electricity.

“Should there be no solution forthcoming from the National Power Corporation (Napocor) or the Private Sector Asset and Liabilities Management Corp. (PSALM) within the next few weeks, utilities like us will be forced to contract out for diesel driven generators,” said Engr. David A. Tauli, senior vice president for engineering of the Cagayan Electric Power and Light Company (Cepalco) during a presentation on the Mindanao Power Crisis to members of the Rotary Club of Cagayan de Oro Centerpoint Friday evening.

However, Tauli cautioned that should this happen, Cepalco customers would pay as much as three times as much as their present power rate.

“Assuming a 50 percent curtailment, you would pay at least P7.50 per kilowatt hour (kWh) if the additional power would come from non-Napocor source,” Tauli said.

He noted that Napocor is compelled by law to stick to its approved power rates and could thus not be in a position to impose rate increases.

Cepalco exec David Tauli interacts with RC Cagayan de Oro Centerpoint Corp. Sec. Susan delas Alas during the open forum of his presentation on the Mindanao Power Crisis.

The energy executive maintains there are six projects the Napocor and PSALM can do without forcing themselves or their customers to pay astronomical power rates under the planned emergency measures the government is considering with the use of calamity funds and the President’s emergency power.

“We really don’t need emergency powers or a state of calamity to address the present power crisis if only Napocor and PSALM immediately implement six key projects which would restore the Mindanao Grid’s capability to deliver the contracted demand to all their customers,” he added.

Of the six, Tauli noted that while Napocor and PSALM have committed to putting the Iligan Diesel Power Plant onstream with 108 megawatts (MW) and dredging the forebay of the Pulangi IV hydroelectric power complex in Bukidnon to increase its peaking capability from the current 85 to 255MW, the two firms have been slow in implementing the measures.

Other options Napocor and PSALM could do immediately are to operate Power Barges 117 and 118 as baseload power plants (rather than as a supplier of ancillary services to the National Grid Corporation of the Philippines or NGCP), to enable them to supply as much an additional 200MW to the Grid, without excessive costs; dredge the Balo-i Plains to enable the Agus 2 HEPP to deliver its full rated capability of 180 MW (from its current dependable capability of only 60 MW) and to rehabilitate  various hydroelectric power plants on the Agus River to restore the power plants to their full capability.

Only when these measures have been fully implemented by Napocor and PSALM and there still remains a power deficit should government deploy the expensive modular generators, Tauli noted.

In his March 19 column in a national business broadsheet, Ateneo de Manila Professor Dean dela Paz estimates the modular gensets would require a “monthly operating expense of P2.5 billion against the estimates of business losses of P1 billion from revenues forgone and incremental expenses from self-generating units. If P2.5 billion includes fuel and operation and maintenance (O&M) charges, the unsubsidized fuel cost soars jumps from P19.60 to over P24.11 per kilowatt-hour (kWh) or higher.”

A former consultant for Energy Affairs of the Joint Congressional Power Commission and the Department of Justice inter-agency committee to review the IPP Contracts, de la Paz said that based on Napocor’s Small Utilities Group (Spug) dela Paz says the emergency funds must cover leasing, O&M and fuel costs. He notes that modulars run on more expensive fuel, while there are now four mothballed 242-MW power barges moored off Navotas which run on less expensive bunker fuel.

Similarly, activist-writer-researcher Arnold Padilla notes how government’s plan to lease modular generation sets to produce an additional 160 MW of electricity in Mindanao would require millions of liters of diesel fuel.

For example, the one (1) MW Mitsubishi Generac Diesel Power Module consumes 238.56 liters per hour of diesel at 100 percent capacity, 187.92 liters at 75 percent, and 119.28 liters at 50 percent .

“If a 1-MW generator runs for the entire day, the extra cost would be P46,490.57. If the entire 160 MW is generated in a day, the figure would be P7.44 million. For one month (30 days), the overpricing would be P223.15 million. If the 160-MW generators were commissioned for three months (April to June), taxpayers will shell out around P669.45 million on top of the real price of diesel and the cost of leasing the generating plants,” Padilla noted in his website.

Tauli said the full implementation of the six projects would considerably reduce the power shortfall by as much as 560 MW, in effect negating the need for the modular gensets.

In his blog, dela Paz concurs that “workable solutions” including tapping the four Navotas 242 megawatt barges and transition supply contracts for two privatized 100 megawatt barges in each of Nasipit, Agusan and Davao.

“There was enough time to settle tax issues over the 35 megawatt facility in Iligan, dispatch peak power from a total of 56 megawatts from embedded private generators and dredge the silted Pulangui Lake thus upgrading 87 megawatts to at least 200 megawatts,” de la Paz said.

“Sans the dredging, these total at least 533 megawatts currently feasible and enough to prevent 8 to 24 hour outages. These do not require corruption-prone emergency powers that offer monetary windfalls for middlemen,” he added.

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