Sep 052014

COSTLIER electricity looms for households and establishments in Metro Cebu by the end of 2014, said an official of the Visayan Electric Co. (Veco).

The increase will be roughly 27 centavos per kilowatt hour or three to four percent higher in most consumers’ electricity bills, said Veco Chief Operating Officer Sebastian Lacson, during his presentation during the 23rd Visayas Area Business Conference in the Oakridge Business Park in Mandaue City last Aug. 22.

He attributed the increase to the privatization of the Unified Leyte Geothermal Power Plant, from which Veco secures 30 percent of its supply, for distribution in Metro Cebu.

“By the fourth quarter of this year, the last (government-) subsidized power in the Visayas will be gone. It (Unified Leyte) has been privatized, and the owners will take possession of the plants by the fourth quarter of this year. Its power supply buyers, like Veco, will be paying market rates for this power…which means rates are going to go up,” Lacson said.

Last year, the Power Sector Assets and Liabilities Management Corp. (PSALM), the government agency tasked to privatize state-owned power assets, held the bidding for the selection and appointment of Unified Leyte’s independent power producer administrators (IPPAs).

The 588.5-megawatt geothermal power complex is located in Tongonan, Leyte. It consists of four production wells: the 125-mw Upper Mahiao plant, 232.5-mw Malitbog plant, 180-mw Mahanagdong power plants and the 51-mw optimization plants.

The good news, amid this impending increase caused by privation and the reduction of government subsidies, is that Visayas has enough power supply.

“There is nothing for us to worry about, as far as supply is concerned…There is enough supply, enough reserves to keep us afloat,” Lacson said.

The Department of Energy (DOE) has also clarified earlier reports on power supply issues confronting the Visayas.

“The DOE would like to clarify that contrary to reports, there is no power shortage in the Visayas. With the recent commercial operations of new coal-fired power plants in the region having a total capacity of 610 mw, power supply remains stable with an available capacity of 1,757 mw, a year-to-date peak demand of 1,375 mw and a reserve power supply of around 380 mw,” the DOE said in a statement.

For 2014, Lacson in his presentation, quoting a DOE report, eight committed power plant projects were expected to start commercial operations from August to December, with a combined supply of 296 mw.

“We have enough projects committed to rely on for our demand in the coming years,” he said. Committed projects in the region are a mix of coal, hydro, geothermal, wind and biomass.

Aboitiz Equity Ventures President Jon Ramon Aboitiz, in recent interviews, has also expressed confidence in the security of power supply for the Visayas.

By the fourth quarter of this year, he said, construction will start in Toledo City on a 300-mw plant of the Therma Visayas Inc. of Aboitiz Power Corp. The P32-billion plant is expected to go online in two to three years.

Published in the Sun.Star Cebu newspaper on September 06, 2014.

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