Slow acting ERC derails DOE objectives

Despite all the yellow and red alerts we have received in recent months of power shortages both in the Luzon and Mindanao grid due to a shortfall in power supply versus demand, Energy Secretary Alfonso Cusi assures the nation there is no power crisis looming.

We could very well accept his assurance if we are more optimistic of what appears to be some foot-dragging of several power plant projects that should bring more than enough electricity supply to the national grid in the coming years.

According to documents presented to the Senate recently, the power plants projects were put on hold several months ago by the Energy Regulatory Commission for various reasons, many with full documentation compliance. All these delaying tactics puts at risk the projects’ timely completion and subsequent connection to a grid that is barely meeting its demand requirements.

One of the biggest projects, the Atimonan One Energy, Inc., in Atimonan, Quezon will be a base-load plant capable of supplying a good net capacity of 1,200 megawatts (MW) to the Luzon grid which sorely needs reserve supplies in view of the unreliable performance of many of the currently operating base-load power plants.

Delay on PSA proposals

The project proponent is eager to start construction of this supercritical coal-fired plant so that the first 600-MW unit will be ready by 2020, but the ERC has yet to approve the power supply agreement (PSA) proposal that will assure the project of a buyer.

According to officials of Atimonan One Energy, all the necessary environment-related documents have been completed, and its Environment Compliance Certificate (ECC) approved by the Department of Environment and Natural Resources (DENR) as early as October 2015.

The proposed coal-fired power plant project will have two 600-MW supercritical-pressure pulverized coal boiler units that will use coal as the main fuel. State-of-the-art pollution control devices will be installed, making it one of the most advanced coal-fired power plants in the country.

Several other power plants face construction delays because of the slow pace by which the ERC is moving in approving PSAs. The expansion of the Calaca power plant facilities by St. Raphael Power Generation Corp. is another example.

The project involves the construction of two 350-MW coal-fired power plants. SRPGC, a power generation unit of Semirara Mining and Power Corp., will be using pulverized coal technology. An ECC for the project had been issued by the DENR on Sept. 17, 2015.

The SRPGC project, another base-load plant in the making, should be ready with at least 350 MWs by late 2019.

Other PSAs pending with the ERC with approved ECCs are the Central Luzon Energy Development Corp.’s Pagbilao, Quezon 600-MW circulating fluidized bed coal-fired plant project slated for operation not later than 2021, and the proposed 300-MW sub-critical circulating fluidized-bed coal-fired power plant of Redondo Peninsula Energy, Inc. in Subic, Zambales.

‘Legally defective’ PSAs

Meanwhile, the ERC early last month deemed the PSAs of 11 power projects as “legally defective” for not containing a sworn Certification of Non-Forum Shopping stating the applicant has not commenced any action or filed any claim involving the same issues in any other court, tribunal or quasi-judicial agency.

Again, many of the submitted PSAs were given months ago, which undermines the private sector’s investment initiatives to respond to the country’s need for power projects that will mitigate the current problem of ageing and unreliable base-load plants in the three grids of Luzon, Visayas and Mindanao.

Among the big power projects affected were the GNPower Dinginin Coal Plant Ltd. Co. (GNPD), a joint venture among GNPower AC Energy Holdings Inc. of the Ayala Group and Sithe Global Power LLC; the Mariveles Power Generation Corp. (MPGC), a joint venture between SMC Global Power Holdings Inc. and Meralco Powergen Corp. for a 600-MW circulating fluidized bed coal-fired power generating facility in Mariveles, Bataan; the San Miguel Consolidated Power Corp.’s coal-fired power plant in Malita, Davao; and the  San Miguel Energy Corp.’s 1,000 MW of the 1,294-MW Sual coal-fired thermal plant.

Flip-flopping on ECCS

Just recently, the DENR announced it is re-evaluating the ECCs previously given to two other big power projects with a combined capacity of 1,300 MWs. Both are considered base-load power projects. ERC decided to stop evaluation of the projects’ PSA applications.

The first project, a 600-MW circulating fluidized bed coal-fired power generating plant in Mariveles, Bataan by the Mariveles Power Generation Corp., is earmarked for completion by 2020. The second, a 700-MW coal-fired power generating facility in La Union by Global Luzon Energy Development Corp., is due for operation by 2022.

The two companies had fully complied with the voluminous requirements necessary to secure an ECC, including the submission of an Environmental Impact Statement (EIS) system and the commitment pledge to implement an approved Environmental Management Plan.

The DENR’s “change of heart” signals new fears among the other power plant project proponents who fear this will lead to similar re-evaluations of their approved ECCs. When will all these flip-flopping end? Can’t we expect a more professional bureaucracy that will do a thorough job at first pass?

Overworked, understaffed, or what else?

Clearly, there is a chokepoint in ensuring the country gets what it urgently needs without, of course, compromising on safety, environmental standards, and pricing.

Most of the power projects are by reputable local companies, which is a totally different scenario from the days of those parachute-power producers that were enticed by our take-or-pay come-on incentive during former president Fidel Ramos’ administration.

While coal-fired power generating plants continue to be controversial for their emissions, new technologies have helped greatly mitigate its environmental impact. And there is no arguing too that coal continues to be one of the cheapest sources of electricity today.

Clearly, the deluge of new power plant applications spawned by the previous administration’s commitment to provide long-term solutions to the country’s potential power crisis problem has put a load of work on our bureaucrats, including the ERC and DENR.

But delays of more than a year do not justify the reason for being overworked and understaffed. Or could the reason be something else?

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