POSTSCRIPT / April 24, 2007 / Tuesday

By FEDERICO D. PASCUAL JR.

Philippine STAR Columnist

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We need electricity, not Napocor excuses

PREDICTABLE: We have an unchanging calendar and regularly recurring seasons. Despite global warming, science has seen to it that the weather — even microweather for a small space-time frame — is predictable.

All Filipinos know that after Semana Santa come sizzling summer months. Everybody knows also that once fuel — such as coal, gas, diesel, oil and even firewood — is used, it is gone forever. We must therefore have a steady supply of it.

Yet, the highly-paid executives of the National Power Corp. failed to see the calendar, the seasons, the demand charts and their inventory of fuel.

So that now, because of incompetence, negligence and maybe even graft, we captive electricity users have to endure brownouts sometimes lasting as long as four hours.

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POWER OUTAGE: Consumers in Central Luzon and Southern Tagalog, and even in Metro Manila, have been complaining of intermittent power outages amid the broiling summer heat.

Pag-asa (why don’t they call it simply the Weather Bureau?) recorded the highest temperature in Metro Manila at 36.8 Celsius last April 17. It warned of more and hotter days ahead.

As electric fans and air-conditioners churned on that torrid Tuesday, the energy consumption peaked at 6,630 megawatts, more than Napocor’s predicted demand of 6,400 mw.

In the very capital of the Philippines, many households did not have electricity for several hours last week. Then we wonder why foreign investors seem reluctant to come in.

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LOAD DROPPING: Rotating brownouts were reported in Metro Manila (including Malabon, Caloocan; Novaliches in Quezon City; Sta. Cruz, Sta. Ana, and Sta. Mesa in Manila) and the nearby provinces of Bulacan (Sta. Maria, Balagtas, Baliwag and Angat), Bataan, Pampanga, Cavite and Laguna.

The power outages came at a time when energy officials and industry players were saying that available power supply far exceeds total demand.

Rotating outages resulted from what officials call “load dropping,” where some areas are deprived of electricity for a period of time to balance the energy output of Napocor and its IPPs (independent power producers).

Compounding the problem, some power plants such as those in Pagbilao, Malaya and Bauang are reportedly running out of fuel.

* * *

PANIC BUYING: The fuel runout at the 735-megawatt Pagbilao plant has prompted Napocor to make emergency coal procurement at the relatively high price of $84 per metric ton (pmt).

That price is above the prevailing market average of $68 pmt. The emergency price is almost triple the procurement cost of $28 to $30 pmt covered by long-term coal contracts that carry the benefit of continuous delivery.

For a panamax shipment of coal, which is about 5,000 metric tons, the emergency cost difference is $1 million compared to market price. One is tempted to ask if all this is deliberate so as to jack up the commission. (Panamax is the biggest vessel size that can pass the Panama canal.)

Whatever the reason, the end-consumers will bear the resulting high price since fuel cost is a component of the Generation Rate Adjustment Mechanism (GRAM).

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LAME EXCUSE: The rotating brownouts demonstrate the failure of the Napocor to supply the power it is mandated to provide as the country’s biggest power generator.

Napocor also failed in its role as the exclusive provider of backup power contracted by the National Transmission Corp. (TransCo.).

In its statement on its failure to anticipate the increased demand, Napocor offered apologies. What consumers need is stable and reasonably priced power, not excuses.

Napocor President Cyril del Callar said the fuel procurement problem was due to the strong demand for fuel by other countries. Ganoon pala, why did he not move earlier, especially now that the peso has been appreciating against the US dollar?

Most people do not know that IPPs are not allowed to buy/import their own fuel. They had been made to sign conversion contracts to buy fuel only from or though Napocor. Who gets the fat commission has been a long-kept state secret.

* * *

PLANTS DRY UP: Under the Energy Conversion Agreements between Napocor and its IPPs, ensuring fuel availability is Napocor’s obligation. The IPPs simply convert the fuel to power.

It is surprising that Pagbilao, a baseload plant, can sustain full-capacity operation only until April 24, due to limited coal supply — at a time when consumption patterns have been historically at their highest.

Pagbilao plant is down to generating only 200 mw despite its 700-mw capacity. Sources said Pagbilao will receive its next coal shipment only tomorrow.

Malaya, on the other hand, could only operate at full capacity for not more than two days last week also because of inadequate fuel.

Bauang, although available, was not able to run last week due to lack of bunker fuel. The 1.7 million liters of fuel it needed was to arrive only 30 hours after the emergency had arisen.

Sources said that Bauang was out of fuel as of last Monday. Its supply arrived only Wednesday night and it started operating at 11 a.m. the next day.

It is obvious that the main reason behind the power outage in Luzon is not rising demand, which is predictable, but negligence, incompetence or even graft.

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(First published in the Philippine STAR of April 24, 2007)

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