CANE POINTS: Power Shortage Continues

Power shortage continues to hound Visayas In an online press briefing earlier this week, Energy Undersecretary Rowena Guevara disclosed that, out of the 20 largest electric distribution utilities in the country, three of the top five DUs with the highest rates in June were in the Visayas.

The highest rate was registered by Southern Leyte Electric Cooperative (Soleco) at ₱16.57 per kilowatt-hour (kWh), followed by Northern Samar Electric Cooperative (Norsamelco) at ₱15.72 per kWh, Kalinga Apayao Electric Cooperative (Kaelco) at ₱14.53, Meralco at ₱14.48, and Leyte Electric Cooperative IV (Leyeco IV) at ₱14.46. Three of these DUs with the highest rates are located in Samar and Leyte in the Visayas. For the same period (June), Negros Power’s average residential rate was ₱13.8417/kWh, which increased by ₱0.2870/kWh this July to ₱14.1287/kWh.

“The increase is mainly due to higher power supply costs in the Wholesale Electricity Spot Market (WESM), where electricity prices rose because of increased demand and the limited availability of several power plants. These conditions resulted in Yellow and Red Alerts being declared in the Luzon and Visayas grids, leading to higher generation costs,” Negros Power explained. Higher generation charge accounted for much of the increase. To make it less burdensome to consumers, Negros Power would not charge the full increase in the generation charge this July. Instead, it would charge only ₱0.20/kWh of the increase in generation costs this July, and stagger the recovery of the balance in the next six months.

Why does Visayas suffer higher electricity rates than Luzon and Mindanao?

Usec Guevara explained that power shortage in the grid caused the generation costs to spike because the grid is compelled to tap more expensive power sources to ensure continuous power supply after numerous power plants went on forced shutdown.

To recall, three power plants in the Visayas – two in Cebu and one in Panay – suffered major outage last May 12. The following day (May 13), 19 power plants in Luzon experienced outages. Moreover, 12 power plants in Luzon were running at less than 100% capacity due to one trouble or another, while one more Luzon power plant was on planned maintenance and was unable to supply to the grid.

NGCP has issued no less than 50 Yellow Alerts for the Visayas since mid-May to mid-July, or an almost daily Yellow Alert.

NGCP issues a Yellow Alert when the power supply can still cover the demand, but the reserve power is too thin that an outage in one major power plant could plunge the whole Visayas grid into darkness (Red Alert).

When the power situation deteriorates into a Red Alert, NGCP is compelled to implement Manual Load Shedding (rotational forced power outages) to reduce the power demand and stabilize the grid to avoid total blackout of the entire Visayas power grid.

The outage of three major power plants in the Visayas continue to exert upward pressure on generation costs. To ensure grid stability and continuous power supply, the grid operator is forced to buy more expensive power from other power plants, thereby increasing the average power cost or generation cost charged to consumers.

Electric cooperatives and DUs are placed in a difficult position: either continue supplying power to their consumers at a slightly higher cost, or implement Manual Load Shedding on large portions of their coverage area.

Unfortunately, there is no middle ground.* (BB)