MORE TO DRAW POWER FROM GRID: Aims for cheaper electricity from spot market

By Francis Allan L. Angelo

Starting tomorrow, May 26, 2021, MORE Electric and Power Corp., the distribution utility in Iloilo City, will start buying electricity from the Visayas grid.

The new supply setup starts with the full operation of MORE Power’s 69KV switching station at Brgy. Banuyao, LaPaz. The station connects Iloilo City directly to the National Grid Corporation of the Philippines (NGCP) which manages the transmission lines or “superhighway” between power plants and distribution utilities and electric cooperatives.

Before the shift to Visayas grid, Iloilo City was directly connected to the subsidiaries of Global Business Power Corp – Panay Energy Development Corp (PEDC) and Panay Power Corp (PPC) – which supplies around 70 percent of the city’s electricity.

PEDC runs coal-fired power plants with a combined capacity of 314 megawatts while PPC operates a 75MW diesel-fired power plant.

The remaining 30 percent of the supply came from other plants in the Visayas grid, particularly Aboitiz Power Renewables Inc and KEPCO-SPC Power Corp.

What is the reason for the new setup?

MORE Power President and Chief Operating Officer Roel Z. Castro said they aim to further lower electricity rates by drawing 100 percent of the city’s electricity supply from the Visayas grid.

Castro said power rates in the city began to go down when they maximized the 30 percent supply from the grid.

“There are power plants in Luzon and Visayas that have excess capacity that they can supply to Iloilo City. The question is how can they bring in their supply if the remaining access or opening is only 30 percent? That’s one. In compliance with Department of Energy directive to make all power supplies competitive, there should be bidding. We cannot do that and be compliant with that directive if 70 percent of our power is only coming from one power plant which cannot go to bidding because they own the line. That can only happen if the city is open to the grid,” he added.

From a policy standpoint, Castro said the old setup was unfair to consumers of Iloilo City.

“To be fair with the consumers and to follow the mandate of DOE which is really our promise when we applied for the franchise which is to bring down the rates, and that can only happen if 100 percent is open to the grid. And that’s the significance of the switching station because level na ang playing field,” he added.

He cited the cases of Bohol and Central Negros Electric Cooperative which enjoyed lower rates after adopting the competitive selection process.

MORE Power has also been procuring electricity from the Wholesale Electricity Spot Market (WESM) which offers relatively low rates for marginal or uncontracted supplies.

The DU even has a trading team that handles the trading of its power contracts with cheaper sources which will further bring down rates.

Indeed, power rates in Iloilo City went down in the past two months.

In its initial phase of operations, MORE Power was able to bring down the average residential rate from P11.31/kWh to P10.15/kWh, or a P1.16/kWh decrease in the average electricity rate in just 12 months.

In April, MORE Power’s P10.28 per kilowatt-hour (kWh) charge is way lower than Central Negros Electric Cooperative or CENECO (P11.11 per kWh) and Visayan Electric Company or VECO (P11.94 per kWh)

Residential consumers will continue to enjoy lower rates in May at P9.726/kWh against P10.277 in April.

But what about the reliability or stability of power supply to the city?

Castro recognized that stability will be an issue as MORE Power could be affected by disruptions in the grid.

“Sa ngayon, our reliability is a bit far (from ideal) because we are having a lot of outages, but these are necessary outages to rehabilitate and expand our services. Hopefully, in the next few years our objective of reliability will be met. But what we are really working on is to bring down the price,” he added.

Engr. Leomel Tambanillo, head of MORE Power’s system planning, said problems in other power plants in the Visayas grid will affect Iloilo City since the power producers, transmission lines, and distribution utilities all belong to the same circuit.

Tambanillo cited the 300MW solar power fields in Negros which are affected by the rainy weather. Low output from these renewable sources will affect the stability of the system and it is NGCP that will try to balance demand and supply by looking for other sources that will fill in the deficit.

“Since we belong to one circuit – the generator, the transmission, and distribution – anyone of these that will fail and cause disruptions in the electrical system will somehow affect us. If a big plant like 200MW or 300MW will pull out from the grid, that will automatically disrupt the system. The fault could also occur in the transmission and affect our services in Iloilo,” he added.

Castro said it is always ideal for Iloilo-based plants like PEDC and PPC to become suppliers of MORE Power to ensure stability “but the process is through the competitive selection process and if they offer the best rate, we will always deal with fairness naman.”

MORE Power on Sunday finished synchronizing its substations to the Banuyao switching station in preparation for its full operation tomorrow.