CPGI runs out of cash, ‘curtails’ operation: Four-hour brownouts feared this summer
posted 5-Apr-2012  ·  
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Thepower industry players in Catanduanes have raised the spectre of four-hourbrownouts this summer as it allowed Catanduanes Power Generation Inc. (CPGI),reported to be losing money, to “curtail” its operations starting last month.

Duringthe so-called energy summit last Friday (Mar. 30), the First CatanduanesElectric Cooperative, Inc. (FICELCO) said that it advised CPGI not to operateits 3.6-megawatt bunker-fuel generating set since March 17, presumably toprevent further revenue losses and to take advantage of the availability ofcheaper power from the three hydroelectric plants.

Itwas bared that CPGI has been losing money in its operation of the power plant dueto the low fuel heat rate approved by the Energy Regulatory Commission (ERC) inits May 2011 order approving the Electricity Supply Agreement between thecooperative and CPGI. The fuel heat rate refers to the number of liters of fuelconsumed by the genset for each kilowatthour produced.

Theindustry officials said the fuel rate of 0.2025 liter per kilowatthour okayedby ERC led CPGI to assume a loss of 0.665 liter per kWh as its application wasbased on a heat rate of 0.268 liter/kWh.

FICELCOofficer-in-charge Rodolfo Mendoza appealed to political leaders and the civilsociety to help persuade ERC to reconsider its position on the fuel heat rate beingsought by CPGI. It asked them to perhaps craft and sign a petition addressed tothe Commission supporting the power provider’s contention.

CPGIrepresentatives, however, assured that its power plant is ready to resumeoperation, knowing fully well that failure to do so would be in breach of theESA it signed with the cooperative. The 3.6-MW genset was actually leased bythe National Power Corporation in 2007 to FICELCO, which turned around andleased the same to CPGI for a reported P1-million annual rental.

Theimpending crisis began on March 19 when CPGI informed NPC that their fuelsupply would only be good for four (4) days as it has run out of cash and canno longer sustain its plant’s operation.

Ifand when CPGI decides to stop plant operation, it would take out from theCatanduanes grid a base load of 3 megawatts, which is equivalent to 31 percentof the total grid capability of 9.6 MW, NPC Plant Superintendent Engr. EdwinTatel informed summit participants.

Oncethe dry season sets in, the hydropower plants of Sunwest Water &Electricity Co. at Hitoma and Solong as well as the NPC’s Balongbong plantwould only be able to contribute 1.2 MW, with the bulk of the demand to beshouldered by the Monark rented mobile gensets at 2.8 MW, the Power Barge 110at 1.2 MW, the derated Marinawa diesel power plant at 0.6 MW and the under-rehabilitationViga DPP at 0.8 MW. Engr. Tatel disclosed that two brand-new 500-kW gensetsfrom China arrived March 16 and are now being installed, with completionscheduled April 23.

Withpeak load during a dry summer estimated at 8.2 MW, there would be a deficiencyof 1.6 MW equivalent to four hours of rotating brownouts in the entire gridfrom 6 P.M. to 10 P.M. from April to August, FICELCO’s Mendoza said.

Herevealed that he asked CPGI to hold its remaining 20,000 liters of bunker fuelon reserve during the Holy Week. The power provider, he added, wants to get anadvance from FICELCO for its fuel costs

Assumingthat CPGI would be out of the grid, the industry players said the only solutionwould be to maximize use of the NPC diesel plants and ask Monark to extend itsoperation by 10 hours, beyond its contracted operation of 12 hours per day, forfive (5) months.

However,the extended Monark operation from April to Augusr will require an additional1,134,000 liters of fuel, nearly equal to its normal 12-hour, five-month fuelrequirement of 1,360,800 liters. If this happens, the total fuel allocation ofthe NPC for its Marinawa DPP and Monark rented gensets would dwindle to  an amount good for only one month. Therewould be no fuel budget for Monark operation for the next six months afterAugust, Engr. Tatel explained.

Onthe other hand, the proposed operation of the Viga DPP and Power Barge 110would entail a fuel consumption of 1,524,096 liters compared to its actualtotal allocation for 2012 of 95,000 liters good for only a week’s operation ofboth plants.

NPCsaid the budget for additional fuel would have to be sought from Congress. Healso informed that the Department of Budget and Management recently slashed theNPC-SPUG’s budget from P19 billion to just P15 billion, including theallocation for the proposed acquisition of three 500-kW gensets for Marinawa.

Inreaction, Department of Trade and Industry (DTI) provincial director IreneoPanti Jr. suggested that the matter be brought to the attention of PresidentBenigno Simeon Aquino III during his scheduled visit here on April 24 for theinauguration of the Doppler radar facility in Bato.

Heurged NPC to make a situational analysis and recommendations for submission tothe president, adding that PMSMEDC and other groups have made far too manypetitions while summit meetings are noted for the absence of the heads ofSUWECO and CPGI.

Ofthe 12 local chief executives invited by FICELCO to the energy summit, noneappeared while Cong. Sarmiento sent a representative. Mendoza had hoped to askGovernor Joseph Cua and the 11 mayors what they could do to help CPGI.

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