Tuesday, December 20, 2005


Energy Secretary Raphael Lotilla (right) with businessmen Tony Jon and Alfonso Uy.

Energy czar: Coal-fired plants
will solve Panay’s power woes

By Francis Allan L. Angelo and Jeehan V. Fernandez

A RELIABLE power plant in Panay Island will prevent another power crisis just like the blackout scenario in Iloilo City resulting from the financial setback faced by Panay Power Corporation (PPC).
Energy Secretary Raphael Lotilla yesterday reiterated the need of putting up a baseload plant in Iloilo “due to the diminishing power supply from the National Power Corporation (Napocor).”
“Panay cannot rely on Napocor for long term energy supply. There is a need to put up a plant here,” Lotilla said.
Lotilla was the guest of honor during the Annual General Membership Meeting of the Iloilo Business Club at Amigo Terrace Hotel yesterday.
The energy czar presented the actual power situation in Panay to the Iloilo business community.
Lotilla said despite the uprating of the 400-MW submarine cable from Leyte to the Cebu-Negros-Panay power grid, “Panay continues to suffer from low voltage.”
“For as long as there is no power plant of sizable capacity here, Panay will always have energy problems. Panay now is suffering from a 56.7MW deficit,” Lotilla said.
As regards the problem of PPC which resulted from the reduction of Panay Electric Company’s power rates, Lotilla “it is a system-wide problem that needs long term solution.”
“Given the current price of oil in the world market, bunker fuel which, is used in diesel-fired power plants like that of PPC, is one of the most expensive fuel. As long as we don’t have a reliable and cheap baseload plant like a coal-fired power plant, we have to be prepared to bear higher power rates. Whether we like or not, a coal plant is the cheapest source of that will immediately solve our problems here,” Lotilla said.
ERC blinks
Meanwhile, Energy Regulatory Commission (ERC) chairman Rodolfo Albano said they will give Peco provisional authority to charge the actual cost of power generation to its consumers so it can pay its debt to PPC.
“The amount will be enough only for Peco to pay PPC so it can sustain its operation. PPC is losing heavily on current generation rate Peco is charging the consumers. We are still working on the figures and formula of the provisional order which will only be temporary until we have decided on Peco’s petition. With these, the PPC already assured there will be no blackouts in Iloilo,” Albano said.
Since last week, the ERC has been giving different statements on the possible solution to PPC’s financial dilemma.
Last Friday, Albano insisted that Peco must pay PPC the actual cost of power generation without burdening the consumers.
Yesterday morning, reports came out that ERC will compel Peco to interconnect with the National Transmission Corporation to get power supply from the Napocor. The ERC also suggested that Peco prepare its generation set at Gen. Luna Street, Iloilo City.
Albino said they expect to finalize the provisional order today.
Since last night, PPC and Mirant Global Corporation held high level meetings to discuss contingency plans if they find the ERC order unacceptable. (Published in The Guardian, December 15, 2005 issue)


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