Saturday, 29th November 2014

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By: Tara Yap

THE MIXTURE of coal and diesel fuel to generate electricity is still the cheapest option for Iloilo City.

This was disclosed by Arthur Aguilar, president of Global Business Power Corp. (GBPC), owner of Panay Energy Development Corp. (PEDC) that operates the 164-MW coal-fired power plant and Panay Power Corp. (PPC) that operates the 72-MW diesel fuel power plant in Ingore, LaPaz, Iloilo City.

At the meeting of Iloilo Economic Development Foundation Inc. (ILED) over the weekend, Aguilar explained why Iloilo City’s sole power distributor Panay Electric Co. (PECO) is relying on a coal and diesel fuel mix as opposed to relying on electricity entirely generated by coal.

Aguilar noted significant increase in power demand during daytime when government offices and business establishments are open and need more power to run appliances.

While “clean coal” is cheaper, it takes a longer period of time to generate the electricity. Thus, it cannot comply with the power needs of Iloilo City during daytime, he explained.

“The nature of Iloilo City electricity market is that PECO must still get diesel power during peak hours in order to get lower rates,” Aguilar added.

In 1998, PECO initially signed a 25-year contract with PPC for the 72-MW diesel-generated electricity.

Aguilar emphasized that if the contract had been pursued until now, PPC rate to PECO would not be less than P9.8/kWh and PECO’s rate will be pegged at P13.6/kWh.

Now, PECO residential rate has dropped to P11.47/kWh with the coal plant in full operation.

“The bottom line, we spent P20 billion to lower your electricity by P2,” Aguilar emphasized the impact of the 164-MW coal plant that became operational in 2011.

Meanwhile, Aguilar again pointed out to ILED the warning that Iloilo City consumers will pay an additional P1/kWh for transmission rate if the National Grid Corporation of the Philippines (NGCP) acquires PEDC.

 

Under-recoveries

Aguilar assures that Iloilo City consumers will not be burdened with the P692.3-million under-recoveries of the coal plant.

PEDC will collect the P0.3242/kWh spread in six to seven years as opposed to the five-year period, which was previously approved by Energy Regulatory Commission (ERC).

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