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Philippines looks to big companies to avert power shortage

Tuesday, October 21, 2014 - 18:04

[MANILA] The Philippine government said on Tuesday it would count on big businesses with diesel-fuelled power generators to avert rolling brownouts in 2015, as it struggles to get authority from the country's Congress to tackle a looming electricity shortage.

The Philippines, one of Asia's fast-growing economies, faces a power shortfall that energy officials said could trigger up to three hours of rolling brownouts a day in Luzon from March to May next year, hurting the country's revitalised manufacturing sector and booming call centre industries.

Conglomerates San Miguel Corp, JG Summit Holdings Inc, Ayala Corp and SM Investments Corp are among those in the Department of Energy's initial list of potential participants in its Interruptible Load Programme. "We need firm commitments. We gave a deadline of Dec. 1 for them to sign up for ILP," Energy Undersecretary Raul Aguilos said at a media briefing, referring to the voluntary scheme.

As of Tuesday, Luzon's power shortage next year was estimated to be as much as 700 MW, smaller than the 900 MW Energy Secretary Carlos Jericho Petilla projected earlier this month.

To avert outages on an island that is home to more than half of the country's 100 million people, big firms with a combined capacity of as much as 1,400 megawatt must commit to run their generators to ease demand from the grid, said Mylene Capongcol, director at the DOE's Electric Power Industry Management Bureau.

President Benigno Aquino is also seeking emergency powers, asking Congress to issue a resolution to let his government enter into power deals for the first time since the industry was privatised in 2001, to avert rolling brownouts.

The government plans to spend as much as US$134 million to buy or rent modular power generators to produce electricity. But some lawmakers said there might be no need for such special authority as strong participation in the ILP scheme would be enough to address the power shortfall.

The Philippine Chamber of Commerce and Industry (PCCI) estimates that up to 1,500 MW of supply could be made available if the government would offer compensation or incentives to owners of generators under the ILP.

Government involvement in power generation is opposed by some advocacy and business groups, including PCCI, with memories of a surge in power prices in the 1990s when former President Fidel Ramos fought a power crisis by fast-tracking several expensive projects that pushed electricity rates higher.-REUTERS

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