VECO eyes rotating brownouts

CEBU, Philippines - The Visayan Electric Company is not discounting the possibility of “frequent and longer rotating outages or brownouts” in their franchise area, if their current power supply contract with the National Power Corporation will be reduced from 240 megawatts per day to 75 megawatts per day starting December 26, 2010.

VECO spokeswoman Ethel Natera said yesterday that they themselves were shocked when they received last December 6 a Letter of Agreement-Extension of Contract for the Supply of Electric Energy with the Power Sector Assets and Liabilities Management, addressed to VECO President Dennis Garcia.

Natera said that in that letter, they were informed that the contract is only for 75 megawatts, a much lower capacity compared to its original contract of 240 megawatts.

Natera explained that currently VECO absorbs no less than 60 percent of Napocor’s shortage, which is VECO’s proportionate contact with Napocor relative to other distribution utilities in the Cebu–Negros–Panay Grid.

 “We believe that a fair proportionate allocation of the Napocor capacity available for contract extension for VECO should be no less than 60 percent also. Otherwise, the possibility of massive power shortages in 2011 of up to 100MW within VECO’s franchise area cannot be discounted. This will result to more frequent and longer rotating outages,” Natera said.

Natera said that the 60 percent request is even lower than what was initially requested but VECO believes the said the request is fair considering that VECO’s share of NPC’s power shortage is 60 percent.

VECO should get about 60 percent also of Napocor’s capacity available for contract extension. 

VECO sources 60 percent of its power requirements from Napocor, which makes it NPC’s largest customer in the whole Visayas grid.

If Napocor’s available capacity is only 360 megawatts, Natera said VECO is asking only for a maximum of 155 megawatts, which is below 60 percent of 360 megawatts.

Natera said that in keeping with its mandate to ensure the delivery of adequate and reliable power for its more than 300,000 customers, VECO has requested PSALM for a reconsideration on the contract extension.

VECO officials are also set to meet with the Department of Energy today on the issue.

VECO at present serves the greater Metro-Cebu area with a peak demand of 380 megawatts daily.

Of the total VECO power requirements, a maximum of 240 megawatts is sourced from Napocor–PSALM, a combined 105 megawatts is sourced from Cebu Energy Development Corporation and Toledo Power Corporation and the peaking requirement of 30 megawatts to 60 megawatts from Cebu Private Power Corporation CPPC.

Natera explained that all of VECO’s contract with other Independent Power Producers co-exist with Napocor contract and serves only a maximum of 45 percent of VECO’s total demand.

Since more than half of VECO’s power requirements are still sourced from Napocor, Natera said these contracts with other IPP’s do not replace Napocor’s capacity and are not meant to replace Napocor’s capacity at all.

She said that while it has bilateral contracts with three IPPs, this is not enough to cover the ever increasing needs of its franchise area.

Natera said if and when Napocor can only give them 75 megawatts daily VECO will be left with no choice but to purchase power from the Wholesale Electricity Spot Market or WESM, which price per kilowatt hour is higher than Napocor. — THE FREEMAN