SPC asked to explain Cebu plant shutdown

MANILA, Philippines - The Department of Energy (DOE) has called the attention of Salcon Power Corp. (SPC), a power generation company, to explain why its Cebu Thermal Power Plant in Cebu went on manual shutdown last July 17.

The non-operation of the plant contributed to the red alert status of the Visayas grid. A red alert status means reserves are insufficient, DOE said.

In a July 18 letter, DOE undersecretary Raul Aguilos said that SPC violated Department Circular 2010-03-0003 which directs all generation companies, transmission service provider, all distribution utilities to ensure adequate and reliable electric power supply in the country.

Specifically, Aguilos said the circular states that “oil-based generation companies shall maintain an adequate stocks of fuel in the country equivalent to 15 days running inventory which includes shipment in transit.”

Salcon Power, in response, said the plant could not run because under its existing operation and maintenance service contract with PSALM, it is PSALM’s responsibility to supply and deliver adequate fuel at its own cost to the Cebu plant.

PSALM is the government corporation tasked to privatize state-owned power assets.

“SPC has been submitting reports on fuel consumption and stock level to PSALM on a daily basis. Since SPC is not responsible for the schedule and delivery of adequate fuel for the Naga Power Plant, SPC should not be charged with the violate or non-compliance of DOE Circular (2010-03-0003,” Salcon Power said in its response to the DOE.

Salcon Power added that the Cebu Thermal Plant was derated to 38 percent (18 MW from 50 MW) and could not fired coal due to unavailability of spare parts for the boiler feed pump that has to be supplied by PSALM.

“Since then, Cebu Thermal Power Plant is operated on pure oil firing that is approximately P50 million a month additional fuel cost vis-a-vis coal/ oil firing,” it also said.

Furthermore, Salcon Power said that in March 2014, the plant was derated to 58 percent or to 30 MW from 56 MW due to air heater elements which need replacement parts to be supplied by PSALM.

In June 2014, the plant was further derated to 11 MW due to the emergency shutdown of induced draft fan no. 1.

Salcon Power said the fan blades need replacement but the company is eyeing to complete this on July 30.