Aboitiz mulls to expand Steag power plant capacity

WITH the power supply crunch in the Visayas nearly over, the Aboitiz Group is setting its sights on Mindanao, where a power crisis is raging.

Erramon I. Aboitiz, Aboitiz Equity Ventures, Inc. (AEV) president and chief executive officer, said subsidiary Aboitiz Power Corp. is considering the construction of a new baseload coal-fired plant to expand its generation portfolio and help stabilize the power situation in Mindanao.

An option is to expand the 232-megawatt Mindanao coal plant of STEAG State Power, Inc., which is 34% owned by Aboitiz Power, Mr. Aboitiz said.

“We’d like to see what we can do in Mindanao. We’re looking at a baseload plant there. We’re also still interested in bidding for PSALM (Power Sector Assets and Liabilities Management Corp.) assets,” Mr. Aboitiz said at the sidelines of the switch-on ceremony of the first 82-megawatt coal plant built by Cebu Energy Development Corp.

In the interim, Mr. Aboitiz said distribution units of Aboitiz Power in Mindanao will be adopting the interruptible load program to address the shortage, which reached 700 megawatts Friday based on the power outlook of the National Grid Corp. of the Philippines.

The program calls on large power users to de-load from the system and generate their own power. Participants in the program are compensated for the incremental cost of running their diesel-fired generators. The Energy Regulatory Commission (ERC) is expected to release the program’s guidelines for implementation by all utilities.

Mr. Aboitiz also believed it was necessary for President Gloria Macapagal-Arroyo to use the emergency provision in the Electric Power Industry Reform Act of 2001 to address the power crisis in Mindanao on a temporary basis.

“Something should be done for at least five to six months. But before this can be done, a declaration of a power crisis will have to be made,” Mr. Aboitiz said.
Aboitiz Power will also continue to explore the possibility of exporting excess power from the Visayas to either Luzon or Mindanao, Mr. Aboitiz said.

“This has been something that we’ve been trying to do,” he said, referring to efforts of Aboitiz Power since last year to export power generated by the 700-MW Pagbilao plant in Luzon to the Visayas, which has been reeling under rotating outages until last week.

The Visayas has been enjoying excess supply since the first Cebu Energy coal plant started feeding power to the grid on March 1. Yesterday, the Visayas posted a 53-MW reserve while Luzon, like Mindanao, was short of supply by 641 MW.
President Arroyo, who led the switch-on ceremonies at the Cebu Energy plant in this western city situated about 50 kms. from Cebu City, said the commissioning of the Cebu Energy plant signalled the end of rotating brownouts in the Visayas.

“From being an importer of power, now that Cebu produces more than it needs, it can even become an exporter of power to Luzon and Mindanao,” the President said.
More new capacities are expected to come in this year. The second 82-MW unit of Cebu Energy will be synchronized to the grid for testing on May 1 while the third unit will be online by December this year.

Panay Energy Development Corp. meanwhile expects to commission its first 82-MW coal-fired unit in October this year and the second in December.
Panay Energy is a subsidiary of Global Business Power Corp., a Metrobank unit, while Cebu Energy is a consortium formed by Global Business Power with partners Formosa Heavy Industries, Aboitiz Power Corp. and Vivant Corp.

KEPCO-SPC Power Corp., a joint venture of KEPCO Philippines and SPC Power, expects to commission in October one of the two 100-MW coal plants that it is building in Naga, Cebu.

The improved power outlook in the Visayas has prompted the Energy department to allow the implementation of the Wholesale Electricity Spot Market here. The Philippine Electricity Market Corp. wants to launch the Visayas market by the end of June this year.