Mindanao Power Crisis is man-made, not due to El Niño: Power Exec

by: Mike Banos

A senior officer of one of the nation’s largest distribution utilities says the power crisis in Mindanao is not caused by the El Niño phenomenon but rather, is man-made.

In a presentation made to the Rotary Club of Cagayan de Oro (Mother Club) at a local hotel March 11, David A. Tauli, senior vice president for engineering of the Cagayan Electric Power and Light Company (Cepalco) said the shortage of power in Mindanao is not due to the dry spell but is “the result of a series of errors over many years in the operation and maintenance of the power plants connected to the Mindanao Grid, particularly the Agus hydro plants.”

“The power crisis is real. It is only in the Mindanao Grid, and not in the Luzon-Visayas Grid,” Tauli noted. “It is not a ploy to increase the rates for electricity in Mindanao. It is not a sinister plot to sabotage the elections.”

Tauli said the current Mindanao power crisis, however, is not due to the lack of new capacity for additional loads, but the lack of generation from

existing power plants to supply present (and not future) contracts for

power and energy.

To illustrate, Tauli showed data from the National Grid Corporation of the Philippines (NGCP) that showed the seven plants of the Agus hydropower complex now averages only 41.3 percent of their combined installed capacity and Pulangi 4 at 19.6 percent or a mere 35.6% for the Agus-Pulangi Hydroelectric Complexes (APHC).

Mindanao Hydro Plants’ Average & Peaking Capability, as of Feb. 11, 2010

Hydro Plant	Installed MW	Average MW	Peaking MW
Agus 1	80	25	30
Agus 2	180	60	65
Agus 4	158	75	100
Agus 5	55	20	27
Agus 6	200	100	140
Agus 7	54	20	30
Agus Total	727	300 (41.3%)	392
Pulangi 4	255	50 (19.6%)	85
A-P Total	982	350 (35.6%)	477

Figures are in megawatts; percentages are of Installed Capacity

Source: NGCP

Although acknowledging the ongoing shortage of power and energy from the hydroelectric plants on the Agus River are due to the low level of the elevation of Lake Lanao at the end of 2009, Tauli said it is a direct result of how the National Power Corporation (NPC) on directive of the Power Supply Assets and Liabilities Management Corporation (PSALM, the private firm which owns NPC and provides funds for its operations) depleted the available water supply in Lake Lanao.

“Why is there lack of generation from existing hydro power plants?” Tauli asked. “The answer of course is because the NPC wasted away the energy it should have stored in Lake Lanao in order to help supply the load in the next six months when there is low inflow to the Lake.”

Previous to this, Tauli said historical data shows NPC was much more prudent in managing the water levels in the APHC but showed a drastic change in the latter part of 2009 when it ran the hydro plants full-tilt despite warnings of an approaching El Niño phenomenon which could affect water inflow.

When NPC became privatized under PSALM, it became profit-oriented and balked at running its diesel plants at a loss, preferring to increase the share of the APHC in the power mix and using the buffer intended to cushion the impact of the coming drought, Tauli said.

Weather forecasts indicate the present dry spell is expected to last until the rainy season begins in June or July 2010, and may extend to the end of the year if the dry spell continues through the second half of 2010.

CEPALCO Senior Vice President David A. Tauli explains to members of the Rotary Club of Cagayan de Oro (Mother Club) why Mindanao is daily plunging deeper into a worsening energy crisis. 

To address the present power crisis, Tauli presented a list of projects which the NPC and PSALM could immediately implement to address the problems that have resulted from the power shortage.

“Full implementation of the projects would end the Mindanao power crisis,” Tauli said. Among the projects listed were the following:

1. Rehabilitation and operation of the NPC-owned Iligan Diesel Power Plants 1 and 2 to their full capability of around 100 megawatts (MW).
2. Operation of the Power Barges 117 and 118 as base load power plants, rather than as supplier of ancillary services to the NGCP, to enable them to supply maximum generation to the Grid, without excessive costs.
3. Dredging of the forebay of the Pulangi 4 Hydroelectric Power Plant to raise its peaking capability to 255 MW from the current 85 MW or less.
4. Rehabilitation of various hydroelectric power plants on the Agus River to restore the power plants to their full dependable capability.
5. Dredging of the Balo-i Plains to enable operation of the Agus 2 HEPP to the full rated capability of 180 MW from its current dependable capability of only 60 MW.
6. Make available additional power supply (around 400 MW) for the Mindanao Grid from other generating plants not yet connected to the grid (such as embedded generators, generators from Luzon or the Visayas imported, and generators from abroad) to enable the NPC-PSALM to supply the power demand and energy contracted from them by their power customers in Mindanao totaling around 1,300 MW.

However, Tauli said the NPC and PSALM are not carrying out the solutions because they require NPC-PSALM to spend billions of pesos, with uncertain and slow recovery of the funds used.

Through civic organizations like Rotary International, Tauli urged the private sector to exert public pressure on NPC-PSALM to carry out the measures. Among these would be a club resolution urging Energy Secretary Angelo Reyes to direct the NPC-PSALM to carry them out immediately.

Tauli said the first five solutions can be immediately implemented by NPC-PSALM and only the sixth solution requires the exercise of presidential emergency powers under EPIRA.