Mindanao power co-ops tap P4-B Malampaya fund

MANILA, Philippines - Electric cooperatives in Mindanao would be putting up power generators by the end of the year after the Department of Energy (DOE) approved the use of P4 billion as loans for the rent or acquisition of the gensets, the National Electrification Administration (NEA) said.

In an interview, NEA administrator Edita Bueno said 15 Mindanao-based electric cooperatives have agreed to tap the P4-billion financial assistance from the Malampaya funds for the acquisition and rental of modular generator sets.

These gensets would aid them in addressing the power supply crunch in the island.

The energy department earlier approved the use of roughly P4.4 billion from the Malampaya funds as loans to the Mindanao-based cooperatives to be administered by NEA.

Bueno said as of end-April, 15 out of the 21 cooperatives in Mindanao have agreed to tap the loans. Out of the 15, nine would be renting the so-called modular gensets while six would be procuring the equipment.

She said the equipment could be in place before the end of the year after the DOE bids out the contracts in May.

“Given the circumstances, the modular gensets can help the Mindanao power shortage. We’re not just looking at this as the final solution but it is a good stop-gap measure,” she said.

A cooperative would need one to two megawatts in additional supply from the gensets, which would entail at least P1.4 million for the rental fee.

Data from NEA showed that the 15 ECs could add at least 93.5 MW in additional capacity. The DOE has said that the Mindanao grid would need additional 38 MW this year.

Mindanao-based electric cooperatives source part of their power requirements from the Angus-Pulangi hydropower plant.

However, Bueno said even with the use of the gensets, there is still no assurance there would be no more brownouts in the island.

Some parts of Mindanao are experiencing seven to ten-hour rotating brown outs.

She said the long-term solution is to have new power plants, but these are expected to come in only in 2015.

Furthermore, electricity rates in Mindanao could go up to as much as P9.56 per kilowatt-hour from the current P6.20 per kwh rate in the island with the genset option.

Based on DOE computation, rental option would translate to an electricity rate of P9.56 per kwh. This is based on the rental fee of a genset of P1.4 million per MW and the estimated fuel cost of P41 per liter for diesel fuel.

On the other hand, the acquisition, to be financed commercially, would translate to a new rate of P8.45 per kwh. This is estimated to cost P22 million per MW, with a two-year warranty.

The cheapest option is acquisition with financial assistance from NEA, which would translate to an electricity rate of P8.09 per kwh.

From the trust fund, NEA would provide a loan for the genset with a proposed interest rate of six percent.