EPDP Media Monitoring [PDF]

EPDP Media Monitoring Nov. 1-6, 2015 PHL ‘least capable’ of coping with natural disasters–report http://www.businessmirror.com.ph/phl-least-capable-of-coping-with-natural-disastersreport/ The Philippines is one of the countries in Asia Pacific that is “least capable” of coping with natural disasters, according to a report released by the United Nations Economic and Social Commission for Asia and the Pacific (Unescap). In Asia-Pacific Disaster Report 2015, the Unescap said over 50 percent of the country is exposed to disasters. However, the Unescap said the country’s coping capacity is only around 20 percent. This placed the country 25th out of 40 countries in the region. “Globally, the expected annual average loss from natural disasters is $415 billion—of which 40 percent is likely to come from 50 countries in Asia and the Pacific. In Myanmar the annual average loss represents 30 percent of its annual capital investment. In the Philippines it is expected to be 14 percent and in Cambodia 10 percent,” Unescap said. Supertyphoon Yolanda (international code name Haiyan) in 2013 is also included in the top 10 worst natural disasters in the Asia and the Pacific region with close to 10,000 fatalities. The worst hit city in the Philippines was Tacloban City in Leyte. The rains and storm surge brought by the typhoon led to death and destruction on a vast scale. Former Metropolitan Manila Development Authority chief Francis N. Tolentino said these findings should prompt local government leaders to “metropolitanize” their respective areas to address concerns in times of natural and man-induced disasters. By “metropolitanizing,” Tolentino said there is a pressing need “to improve city and provincial structures and infrastructure.” He made the same call when he was guest speaker at the Cebu Urban Summit held recently. “Leaders should be forward looking. A vision, say for the next 10 to 20 years to improve road network, drainage, garbage disposal, and to build stronger buildings,” Tolentino said. He said future leaders should start conceptualizing modern cities that can address growing population and demands of its populace. Tolentino emphasized the need for national and local leaders to “think and visualize in one direction to have synchronicity.”

He said leaders should set their eyes on good governance which translates into “improving urban structure and land use; urban transport and highways; water supply, disposal management and solid waste management.” Philippines not ready for Asean integration – MVP By Richmond S. Mercurio (The Philippine Star) | Updated November 3, 2015 - 12:00am http://www.philstar.com/business/2015/11/03/1517608/philippines-not-ready-aseanintegration-mvp MANILA, Philippines - Ready or not, the Philippine business community has no choice but to face tougher competition from its regional counterparts. As the deadline for the Asean Economic Community (AEC) nears, business tycoon Manuel V. Pangilinan said the Philippines remains unready for the economic unification of the regional market. “No, we’re not ready. .. People keep talking about integration but what does it really mean? I’m not saying it will not happen in one day, but not in our lifetime. Let us be realistic that it won’t happen because politics will intrude,” Pangilinan said. “Like sugar, it is cheaper to import sugar, that will be good for Filipino consumers but you will displace four million people from their jobs. If you’re a sitting president, can you afford that, turn away four million of your people without the livelihood? You cannot. It will be suicide. And any sitting president, whether in Indonesia or Malaysia, will have the same issues,” he added. Pangilinan chairs the Philippine Long Distance Telephone Co., Metro Pacific Investments Corp., and Manila Electric Co. The creation of the AEC by yearend is seen to strengthen intra-regional trade and the free flow of capital, goods, skilled labor and services within the 10-nation Asean member states. “For instance, does Jollibee have a big presence in Thailand? None.Why? Because there are Thai companies already in that business. Are there significant number of Filipino lawyers or accountants or nurses in Singapore? No. Why? Because the doctors, lawyers, nurses in Singapore will complain that Filipinos are taking over their job. Naturally the government will protect their people. So where is the integration happening?” Pangilinan said. The Philippine government, for its part, has said the country is in a position to take on the challenges and seize opportunities in the upcoming full integration of the AEC beginning next year.

In a statement issued in September, Trade and Industry Secretary Gregory Domingo said he has already assured that the country is well-positioned for the integration. Domingo said the country’s stable economic performance along with the various reforms implemented has put the Philippines in a good position to benefit from the upcoming economic integration. DoE orders tweaks to WESM rules http://www.bworldonline.com/content.php?section=Economy&title=doe-orders-tweaks-towesm-rules&id=118026 Signed by acting DoE Secretary Zenaida Y. Monsada, the circular has called for a number of changes, including a shorter trading and dispatch interval of five minutes, and automated pricing corrections. It also calls for ex-ante pricing -- or pricing based on forecasts -- only for every fiveminute trading and dispatch interval and a one-hour interval for settlement purposes based on the weighted average of the five-minute ex-ante prices. The circular has also removed a constraint to WESM’s market dispatch optimization model, called Pmin, or a plant’s minimum output level, that was seen as costly to maintain. The DoE has also called for the mandatory integration of distribution utilities’ subtransmission networks that affect dispatch schedules and prices in the spot market into WESM’s market network model. The enhancements also set the following: • Changing the values and priorities of some of the constraints violation coefficients, including the corresponding values thereof taking into consideration the imminent implementation of the WESM reserve market; • Imposition of a WESM offer cap and floor for energy and reserves as determined through joint study by the DoE, Energy Regulatory Commission (ERC) and Philippine Electricity Market Corp. (PEMC); • Implementation of hourly day-ahead projection with sensitivities and hour-ahead dispatch; • Enhanced training of WESM participants. Under the circular, the Energy department also listed down the responsibilities of PEMC, National Grid Corporation of the Philippines and WESM members. Among others, the PEMC was directed to come up with the proposed changes to the WESM rules and market values, secure the ERC approval for changes to the price

determination and conduct information, education and communication campaign. -Victor V. Saulon Napocor allots P400 M for diesel-to-hybrid conversion By Danessa O. Rivera (The Philippine Star) | Updated November 5, 2015 - 12:00am http://www.philstar.com/business/2015/11/05/1518416/napocor-allots-p400-m-dieselhybrid-conversion MANILA, Philippines - The National Power Corp. (Napocor) is spending over P400 million to transform 21 of its diesel power plants in Small Power Utilities Group (SPUG) areas into hybrid plants. This is part of the state-owned firm’s renewable energy (RE) program for 2017- 2020, Napocor vice president for corporate affairs group Urbano C. Mendiola, Jr. said. The program aims to provide 24/7 reliable electricity supply to all of its service areas. Under the program, Napocor will spend P113.6 million to put up an additional 568 megawatts of hybrid plants in 2017, P78.4 million for 392 MW in 2018, P113.6 million for 568 MW in 2019 and P124.8 million for 624 MW, or a total of P430 million over the fouryear period. Mendiola said there are 21 candidate areas involved in the 2017-2020 hybridization of diesel power plants with solar and wind energy. “Most of the areas were chosen for their tourism potential,” he said. Up for conversion in 2017 are those diesel plants located in Gigantes Island in Iloilo, Almagro and Sto. Niño Islands in Samar, Sto. Niño and Doong Island in Cebu, and Maripipi Island in Biliran. In 2018, those plants in Luuk Island in Sulu, Banton and Concepcion Islands Romblon, Tagapul-an Island in Samar, and Balimbing Island in Tawi-Tawi are scheduled for hybridization. Those in Guintarcan Island in Cebu, San Vicente in Samar, Sintangkay Island in TawiTawi, Sacol Island in Zamboanga, and Jomalig Island in Quezon are scheduled for conversion in 2019. Finally, diesel plants in Limawasa Island in Southern Leyte, Tandubas and ManukMangkaw Islands in Tawi-Tawi, Balut Island in Sarangani, Hikdop Island in Surigao, and Palanan in Isabela are targeted for hybridization in 2020.

Last September, Napocor president and CEO Ma. Gladys Cruz-Sta. Rita said the stateowned company has been planning the use of RE hybrid systems in its missionary electrification program to lower the Universal Charge for Missionary Electrification (UCME) of the 290 Small Power SPUG power plants across the country. The current UCME is at P0.15 per kilowatt hour. Under the Electric Power Industry Reform Act (EPIRA) of 2001, UCME is collected from end-users. The collections will be used for the electrification of remote communities or areas not connected to the main transmission grid. Meralco Power Gen eyes construction of plants next year By Danessa O. Rivera (The Philippine Star) | Updated November 4, 2015 - 12:00am http://www.philstar.com/business/2015/11/04/1518009/meralco-power-gen-eyesconstruction-plants-next-year MANILA, Philippines - Meralco PowerGen Corp. (MGen), the power generating unit of power distribution giant Manila Electric Co. (Meralco), has committed to move forward with the construction of three of its planned coal-fired power plants by next year. These are the 455-megawatt (MW) San Buenaventura Power Ltd. (SBPL) project in Quezon; the Redondo Peninsula Energy (RP Energy) project in Subic, Zambales; and the 2x600 MW Atimonan One Energy project in Quezon. For the SBPL project, financial close and issuance of notice to proceed is expected within the last quarter of 2015, MGen senior vice president Angelito U. Lantin said. “Currently, we’re doing site preparation works. Full-turn over of site to engineering, procurement and construction (EPC) contractor will be in the first half of 2016 and commercial operations in the first half of 2019,” he said. MGen has awarded the EPC contract to a consortium of Japanese and Korean contractors and equipment suppliers. SBPL is a joint venture of MGen with New Growth B.V., a wholly-owned subsidiary of Thailand’s Energy Generating Co. Meanwhile, Lantin said RP Energy is still working on the right-of-way (ROW) of transmission line connections, which will finally determine whether it would build a 300 MW plant or 600 MW in the next few months. “This is work in progress in cooperation with the National Grid Corp. of the Philippines,” he said. “We hope to achieve clarity in the ROW in the next few months.” Being considered in the ROW of transmission lines are the ancestral domains and protected areas.

“We are still targeting to start construction in the first quarter of 2016 and completion target of second half of 2019,” Lantin said. RP Energy is a consortium composed of MGen, Aboitiz Power Corp. and Taiwan Cogeneration International Corp. Finally, the Atimonan project would start early works in 2016 following the completion of the feasibility studies by year-end, Lantin said. “Early works are targeted to start early next year and this pertains to construction of the site, access road and resettlement for the communities that will be displaced by the power plant while completion is targeted for late 2020,” he said. Macquarie raises solar portfolio By Danessa Rivera (The Philippine Star) | Updated November 4, 2015 - 12:00am http://www.philstar.com/business/2015/11/04/1518011/macquarie-raises-solar-portfolio MANILA, Philippines - An equity investment fund managed by Macquarie Infrastructure Management (Asia) Pty Limited has increased its solar power portfolio after buying into Bronzeoak Philippines’ Negros project. In a statement, Bronzeoak said the Philippine Investment Alliance for Infrastructure (PINAI), managed by Macquarie Infrastructure and Real Assets (MIRA), completed its second solar plant investment with the acquisition of a majority stake in Negros Island Solar Power (islaSol). The terms of the transaction, however, were not disclosed. PINAI’s investors include the Government Service Insurance System (GSIS), Asian Development Bank (ADB), APG Asset Management (APG), and Macquarie. The deal brings PINAI’s Philippine solar assets to 125 megawatts (MW), adding 80 MW to its first 45 MW acquisition of San Carlos Solar Energy (Sacasol) in September. “PINAI’s acquisition of islaSol represents the fund’s strong commitment to building the country’s clean energy infrastructure. We are delighted to expand our partnership with the country’s leading infrastructure fund, its investors, as well as with its manager, MIRA, a global leader in infrastructure investment and asset management,” Bronzeoak Philippines president Jose Maria P. Zabaleta said. The 45-MW SaCaSol plant, inaugurated in May 2014, was the first project to receive incentives under the feed-in-tariff (FIT) scheme. On the other hand, islaSol comprises of two solar farms in Negros Occidental with 32 MW located in La Carlota and 48 MW in Manapla. Meralco unlikely to meet prepaid-electricity service target this year http://www.businessmirror.com.ph/meralco-unlikely-to-meet-prepaid-electricity-servicetarget-this-year/ The Manila Electric Co. (Meralco) will likely fall short of meeting its internal target to install 40,000 prepaid-electricity meters this year.

The utility firm was earlier given the green light by the Energy Regulatory Commission (ERC) to deploy 40,000 electricity meters to customers within its franchise area. Meralco had wanted to finish the rollout by the end of the year. However, Alfredo S. Panlilio, Meralco’s senior vice president, said that “by year-end” only “close to 30,000 meters” would be activated. As of end-September this year, he added that Meralco has activated 14,295 prepaidelectricity meters. Pilot tests for Meralco’s prepaid retail electricity service (PRES) were conducted starting in February 2014. PRES is now available in Manila, and parts of Angono, Taytay and Cainta, in Rizal. “Manila is fully covered,” Panlilio added. Meralco has a pending application with the ERC to install an additional 100,000 meters. “We are running a bit short on meters. We are still waiting approval from the ERC to act on our proposal. For next year we will continue to push that and educate the market,” the Meralco official said. A check with the ERC showed that Meralco’s application is still being deliberated. “It is still for resolution,” ERC Executive Director Francis Saturnino Juan said in a text message when sought for comment on Monday. In another text message reply, lawyer Vanessa Reynoso of the ERC said the commission awaits the submission of concerned parties before Meralco’s application is deemed submitted for resolution. “Once all required submissions are in, the Commission can already start deliberating on the matter,” she added. Meralco First Vice President and Head of Regulatory Management Ivanna de la Peña, meanwhile, said a portion of the 100,000 meters targeted for next year would be allotted for the National Housing Authority’s (NHA) new housing projects. Should demand exceeds supply, de la Peña said Meralco would have to go back to the ERC to apply for more meters. “If necessary, we will have to ask the ERC for more meters, depending on the requirements and take-up on the prepaid service,” she said. Property developer 8990 Holdings Inc. tapped Meralco’s PRES last month for its project sites. Both firms entered into a memorandum of agreement for the implementation of PRES to 8990 Holdings’ property developments, starting with Bella Vista, which is under its Deca Homes brand. Meralco President Oscar Reyes said Bella Vista is the first private subdivision enrolled in PRES, providing its homeowners a more flexible, convenient and budget-friendly option that fits a modern family lifestyle. Meralco has tapped General Electric as the system integrator for the advanced metering structure of the service; Orga Systems for the billing aspect of the service; and Ecologic Analytics for the meter data-management system. The system will enable customers to monitor their electricity consumption, balance, credit-purchase history and account information.

Customers may purchase credits in denominations of P100, P200, P300, P500 or P1,000 for every transaction. Load will be available at Meralco business centers, bayad center outlets and participating retail outlets, which include sari-sari stores, convenience stores, drugstores and department stores. The prepaid service offering will enable customers to budget their electricity consumption. The system also informs consumers if they need to reload immediately to avoid disconnection. Prepaid electricity is also being used in other countries such as Indonesia, Australia and New Zealand, Meralco said. AES deploys first energy battery storage in PH Read more at http://www.mb.com.ph/aes-deploys-first-energy-battery-storage-inph/#iCiqkHmETcV82v0c.99 American firm AES Corporation will finally deploy its first battery energy storage in the Philippines, one that can underpin the quality of power service delivery in the major grid of Luzon. The company has announced that it will install a 10-megawatt energy storage facility that shall be an “interconnected capacity” to the Luzon grid. Its Advancion Energy Storage, according to the US firm, will be located proximate to its 600-megawatt coal plant in Masinloc, Zambales. “The energy storage array will enhance grid reliability by providing fast response ancillary services like frequency regulation,” the company explained. According to AES Philippines managing director Neeraj Bhat, their company considers “energy storage bringing significant benefits for customers in the Philippines, especially in addressing concerns in the power grid like shortfalls on reserve capacity. The battery system also increases “levels of variable output renewable plants, and faces challenges associated with an island-based grid system,” he expounded. The company further emphasized that “with more efficient balancing of supply and demand, (battery storage) will also lower costs to consumers.” The battery technology will likewise be a good support to the country’s massive installation of renewable energy facilities – because it could help maintain grid stability even with the “intermittency” of such options. Meralco completes 7 key capital projects http://www.mb.com.ph/meralco-completes-7-key-capitalprojects/#725GAQXVF7Q55Mdd.99 Power utility giant Manila Electric Company (Meralco) has completed seven major capital projects this year and similarly advanced implementation of those that are integral to the government-underpinned public-private participation (PPP) projects. As of end-September, the company noted that it already spent P7.8 billion from its programmed capital expenditures for the year.

The completed electrical capital projects include the 69-kilovolt Mahabang ParangBatangas City line; the expansion of the Fort Bonifacio Global City substation; the construction of the 115kV Dasmariñas-Imus line; and the expansion of the Tutuban substation. The company emphasized that it also gained “significant completion milestones for the timely relocation of Meralco facilities” that would be traversed by the Ninoy Aquino International Airport (NAIA) Expressway Project. Additionally, the utility firm has cleared its facilities at areas being affected by the road and bridge-widening projects of the Department of Public Works and Highways. Digitizing and modernizing its network and systems are also in the continuing capital outlay plan of the distribution firm, labeling such as its pathway into the electricity sector’s “new normal.” Meralco president Oscar S. Reyes said “we continue to set our sights on the long-term requirements of our franchise area,” noting that such investment momentum will carry on in their next capex program. The company has been emphasizing that it is “mindful of technological developments capable of disrupting Meralco’s business model,” hence, it has to keep pace with the trend. Meralco chairman Manuel V. Pangilinan stressed that the utility firm “will continue to keep a close watch over these transformative changes” and shall take these as foothold in improving service to their customers. For the upcoming regulatory year, Meralco is seeking the approval of the Energy Regulatory Commission for its over P17-billion proposed capex to bankroll its next batch of projects.

WESM prices hit all-time low in Sept. http://www.mb.com.ph/wesm-prices-hit-all-time-low-in-sept/#GuDpCok4rgMCBiDC.99 Average settlement prices at the Wholesale Electricity Spot Market (WESM) tumbled to all-time low for the year in September billing at P2.28 per kilowatt hour (kwh), nevertheless, the forthcoming El Niño dry months are anticipated to trigger fresh round of rate spikes in the market. The September low prices, according to WESM operator Philippine Electricity Market Corporation (PEMC), was technically a reverse of the August trend when settlement rates had been higher due to forced outages in some power plants.

Throughout 2015, spot market settlement prices had been seen highest in June billing month at P7.63 per kwh. Another high-price month was February at P6.47 per kwh. July was also technically spiky month at P5.59 per kwh; and the same goes with March billing at average P5.53 per kwh. Comparatively, August billing month was still ‘tame’ at P4.96 per kWh; while May was also on the ‘high side’ at P4.62 per kWh. Aside from September, the low-settlement-price months were: April at P3.09 per kWh; and January at P3.88 per kWh. But since most of the power supplied to distribution utilities had been tied to bilateral contracts, the impact of extremely low spot market prices and even the high-price months have not been felt as much in the consumers’ electricity bills. From the time that the spot market had been pummeled by extreme price spikes in November-December, 2013, several lessons as well as policy formulations have been prescribed for the WESM. The secondary cap was a major policy imposition since then – and it had proven to be a ‘price softening scheme’ at every upward swing in spot prices. Industry players though have been batting for a more cost-reflective secondary cap especially for the peaking facilities. Within the third quarter, Manila Electric Company (Meralco) which is the country’s biggest distribution utility, has also reported that the rainy season “reflected the lowest billed volume of energy sales”; and had in turn eased spot market prices. The utility firm likewise saw the generation charge component in the electric bills drastically plunging to “a record low of P4.00 per kWh,” which it noted had been the lowest since October, 2009. El Niño-induced power supply dilemma for Mindanao grid kicks in http://www.mb.com.ph/el-nino-induced-power-supply-dilemma-for-mindanao-grid-kicksin/#ttMqewiSraEbhsk7.99 Nevertheless, MinDA public affairs director Romeo Montenegro has noted that measures are currently being drawn up “to cushion the impact of the weather phenomenon to the power sector.” For several years, Mindanao grid had been caught in a string of “summer blackouts.” The year 2016 could have come as a relief because of the entry of new coal plant capacities in the grid, but forecasts of “prolonged period of extremely dry months” could still frustrate expectations of improved power supply. Citing data from the National Power Corporation, MinDA has noted that “water levels in Lake Lanao is now reaching critical levels at 699.86 meters above sea level” – that was as of October 30, 2015 report. The development agency that is also taking the core of the Mindanao Power Monitoring Committee expounded that the data inferred “nearing the lake’s minimum operating level of 699.15 masl.” MinDA has emphasized that “the weather phenomenon resulted (in) the reduced capacity of the Agus-Pulangui hydropower complexes.”

Referencing further on the October 30 report, it noted that the Pulangui IV plant was only producing 60 megawatts from 144MW when water elevation was still better on October 26. The Agus hydropower plants, on the other, were also at de-rated level of generation – and the dilemma had just been compounded last week by transmission tower bombing in Marawi City. Montenegro has assured though that “despite the current situation, we are still confident that by 2016, Mindanao will have a better power situation with the entry of base load power plants,” because this could then lessen the grid’s dependence on the hydropower facilities. Even the Department of Energy (DOE) has earlier indicated that Mindanao will likely be the “most problematic” at the strike of El Niño from November 2015 to March 2016. The department, with the help of a task force collaboratively formed with the industry payers, had been sorting out options to augment supply in the grid – especially for a number of electric cooperatives. Deployment of generating sets in areas that cannot be covered by capacity additions was initially proposed – but the ultimate decision still rests with the electric cooperatives based on determination of the “paying capacity” of their customers. Panay Electric looking to connect with main grid By Louine Hope U. Conserva, Correspondent http://www.bworldonline.com/content.php?section=Economy&title=panay-electriclooking-to-connect-with-main-grid&id=118029 ILOILO CITY -- The Panay Electric Company, Inc. (PECO) is finalizing plans to connect with the main grid by the first quarter of 2016 as the distribution utility prepares to sign new contracts for additional supply from three power firms. Engineer Randy S. Pastolero, PECO vice-president for operations, said the company has just finished an initial survey and presented this to the National Grid Corporation of the Philippines (NGCP), operator of the country’s power grid. “We will seek their approval before implementing it,” said Mr. Pastolero. Michelle T. Visera, NGCP-Western Visayas corporate communications and public affairs officer, confirmed ongoing discussions with PECO. “They sent a letter of communication to us. But as of now, I think there is still no final plan on their part,” she said. Mr. Pastolero said PECO will be connecting to the Visayas grid as it sources power from the 135-megawatt (MW) coal-fired plant of Palm Concepcion Power Corp. (PCPC) through the main transmission lines of NGCP. PCPC’s plant is expected to be operational by May 2016. PECO also plans to buy power from the third unit of the coal-fired plant of Panay Energy Development Corp. (PEDC) and the 340-MW coal-fired power plant of Aboitiz Power Corp. (AboitizPower) in Toledo City, Cebu.

The third unit of PEDC, a subsidiary of Global Business Power Corp. that operates two 84-MW plants at in Iloilo City, will be completed by June 2016, while that of AboitizPower is due to start in early 2018. Mr. Pastolero said the planned power contracts are in preparation for the expected increase in Iloilo City’s electricity demand to 150 MW by next year. “The city will breach the 100-MW requirement during summer and have a peak load of 150 MW. It will be higher compared to this year’s peak load for summer, which only reached 97 MW,” he said. He added that PECO expects demand to go up by 20 MW due to the heat brought about by the prevailing El Niño, which the country’s weather bureau projects to last until the middle of 2016. The PECO official said the company can assure customers of a stable electricity supply in the next three to five years with the additional contracts. “We do not have a problem with supply considering that the available capacity of the coal plants and diesel plants are stable. But we need additional sources in case our system in our franchise area in Iloilo is down,” he said. BOI okays Nickel Asia’s equity purchase in Biliran geothermal http://www.mb.com.ph/boi-okays-nickel-asias-equity-purchase-in-bilirangeothermal/#LP32Xe3bJrXmJOyB.99 The Board of Investments (BOI) under the Department of Trade and Industry has given go-signal to Nickel Asia Corporation’s (NAC) equity purchase in the planned 100megawatt Biliran geothermal power project. The transaction involving NAC will change the ownership structure of the Biliran Geothermal, Inc. (BGI), the project’s corporate vehicle. BOI okays Nickel Asia’s equity purchase in Biliran geothermal by Myrna Velasco http://www.mb.com.ph/boi-okays-nickel-asias-equity-purchase-in-biliran-geothermal/ The Board of Investments (BOI) under the Department of Trade and Industry has given go-signal to Nickel Asia Corporation’s (NAC) equity purchase in the planned 100megawatt Biliran geothermal power project. The transaction involving NAC will change the ownership structure of the Biliran Geothermal, Inc. (BGI), the project’s corporate vehicle. Effectively, NAC is the majority equity holder in Emerging Power, Inc. (EPI), which currently is the major investor in the Biliran geothermal venture with 60-percent stake. Prior to the transaction firming up NAC’s entry into the project, it was another Filipino firm Filtech Energy Corporation which had been holding the majority interest of 60 percent in the Biliran project; while Iceland firm Orka Energy holds the balance of 40percent.

For the project to advance, NAC has guaranteed “the loan facility of EPI for up to P3.0 billion over a three-year period to finance EPI’s renewable energy projects.” In a statement to the media, EPI president Martin Antonio Zamora has noted that they consider the Biliran concession “as one of our major projects.” He thus assured the BOI that “the project will materialize,” and that the plant will eventually augment power supply and economic benefits to its host community. From a targeted capacity of 100MW, EPI has further indicated that initial research also shows “another estimated 170MW could be developed in the northern part of the concession area.” The company said it already completed drilling of at least eight wells in the southern portion of its awarded service area. The Biliran venture has been granted a 25-year geothermal renewable energy service contract covering 260 kilometers of concession area in Biliran province.

Another 50MW solar farm to rise in Batangas http://www.mb.com.ph/another-50mw-solar-farm-to-rise-inbatangas/#tSZmET5VVuWD0P78.99 The Department of Energy (DOE) has awarded another renewable energy service contract (RESC) to a Filipino firm for a proposed 50-megawatt (MW) solar power development. The grantee-firm is Roxas Green Energy Corporation which will be working on the project at its chosen site in Nasugbu, Batangas. The solar farm, according to the project sponsor firm, is targeted for commercial commissioning by the first quarter of 2016. For all investors engaged in solar projects, the first quarter of next year is a well-known target completion date because March 15 will be the cut-off for the installations that could be included in the second wave of feed-in-tariff (FIT) for the technology. It has been set as a race by the energy department, and the grant of FIT incentives shall be done on a “first come, first served” basis. The second round of FIT for solar as approved by the Energy Regulatory Commission (ERC) had been pegged at P8.69 per kilowatt-hour (kWh) – down from the initial incentive of P9.68 per kWh. The first project-beneficiaries had just been limited to 50MWs, to the dismay of many interested parties; thus, the DOE was prompted to raise the FIT-supported installation to 500MW. Energy officials though have been indicating that even the additional 450MW may not be saturated yet by March 15, 2016 because some installations have hurdles with permitting as well as right-of-way concerns at their project sites

Rotating Davao brownouts to continue until NGCP tower repair By Maya M. Padillo, Correspondent http://www.bworldonline.com/content.php?section=Economy&title=rotating-davaobrownouts-to-continue-until-ngcp-tower-repair&id=118032 DAVAO CITY -- An official of Davao Light and Power Co. (DLPC) said the rotating brownouts in its franchise areas will continue until the tower of the National Grid Corporation of the Philippines (NGCP) that was bombed last Oct. 29 is repaired. Arturo M. Milan, DLPC executive vice-president and chief operating officer, said in a news conference yesterday that the company was informed by NGCP that the restoration work could take between five and 10 days. Mr. Milan also apologized for giving only limited information. “I would suggest you try to ask NGCP because they are so selective in giving information and our information is so limited,” he said. “This is just an update of the current situation. We were really not prepared to do a press conference last Saturday because we were also groping for information to give,” he added. DLPC issued a statement on Oct. 30 announcing the rotational power interruptions and indicated that NGCP had implemented “a Mindanao-wide grid curtailment due to the derated capacity of Pulangi and Agus Hydropower plants due to low water elevation as an effect of the El Niño.” Mr. Milan said the company has been told that the NGCP is still securing the area of the bombed tower. “They have to secure the area first... Five to 10 days because they will give an allowance (as) to the extent of the damage of the tower,” Mr. Milan said. The damaged tower connects the southern Mindanao area to the grid. “That is why we are shut out now, because we have no supply from Agus 1 and 2 in Marawi that connects to Kibawe,” he explained. The current allocation of DLPC, which serves Davao City and parts of Davao del Norte, from the grid has been reduced to 109 megawatts (MW), less than half of its contracted 273 MW. “We’re doing our best on how we can mitigate this supply (deficiency),” Mr. Milan said, noting that all available back-up sources are being tapped, including the interruptible load program with the commercial and industrial customers. Power outages to hit Angeles, Ecija towns http://www.philstar.com/nation/2015/11/05/1518381/power-outages-hit-angeles-ecijatowns ANGELES CITY, Philippines – This city will experience power interruption for nine hours today, while the Army’s North Luzon base in Fort Magsaysay in Laur, the city of Gapan and eight more towns in Nueva Ecija will have no power for eight hours tomorrow, the National Grid Corp. of the Philippines (NGCP) announced yesterday.

The NGCP said power in this city would be cut from 8 a.m. to 5 p.m. to pave way for the repair and maintenance works at the Mexico sub-station. Towns served by areas 1 and 2 of the Nueva Ecija Electric Cooperative will experience power outage from 9 a.m. to 5 p.m. These include the towns of Sta. Rosa, San Leonardo, Peñaranda, General Tinio, San Isidro, San Antonio, Jaen and Cabiao. The NGCP said they would conduct a clearing operation and maintenance works along its Cabanatuan-San Isidro lines 1 and 2. – Ding Cervantes, Manny Galvez, Ramon Efren Lazaro

EPDP Media Monitoring 09 - 13 November 2015 ________________________________________________________________ _________________________________

No timeframe yet on issuance of definitive guidelines on CSP http://www.mb.com.ph/no-timeframe-yet-on-issuance-of-definitive-guidelines-oncsp/#PSCwL5ah4CwHHeJ7.99 The competitive selection process (CSP) on power supply procurement of distribution utilities (DUs) was already set as a mandatory policy, but the issuance of guidelines or definitive rules is something that the concerned government agencies would not be rushing. “There’s no timeframe yet on when the guidelines will be finalized,” was how Department of Energy (DOE) acting undersecretary Mylene Capongcol has noted, while emphasizing that they are still studying the details of the CSP implementation. The CSP came as “code puzzle” to the power industry, with many of them still clueless on how to carry out a mandate without the necessary details and implementing guidelines. Notably, for DUs with expiring bilateral contracts, they have to figure out if there is already a moratorium on pursuing any bilateral contracts with suppliers – including the negotiations that are already for firming up. When asked on this matter, Energy Regulatory Commission (ERC) chairman Jose Vicente B. Salazar said “there is no moratorium on bilateral contracting because the result of the CSP is still a bilateral agreement.”

He added “bilateral contracting is allowed as long as it complies with the resolution on CSP.” The CSP mandate was issued last week by the ERC via Resolution No. 13 Series of 2015. The policy will be effective upon compliance with publication requirements. That was essentially ERC’s own version as anchored on its 2013 plan on such policy – somehow diverting from the CSP Circular that was issued during the tenure of Energy Secretary Carlos Jericho Petilla. In the ERC version, the third party and the mandated aggregation of the DUs’ requirements have been conspicuously missing. But Capongcol said these CSP provisions or proposals might still be tackled as they continually discuss the implementing rules of the policy. According to Energy Secretary Zenaida Y. Monsada, “the DOE and ERC are working closely together” on the policy, stressing that such was anchored on balancing “the interests of the consumers and the industry participants.”

SPC Power to file MR on SC ruling http://www.mb.com.ph/spc-power-to-file-mr-on-sc-ruling/#fZqcJCsycuZ3mkkC.99 SPC Power, which was held as the new owner of the 153-megawatt Naga thermal power facility, will seek reconsideration of the Supreme Court (SC) ruling on the “right to top” provision in the facility’s divestment which also voided the asset’s sale process. This was indicated by the company in its disclosure to the Philippine Stock Exchange (PSE), emphasizing that it “intends to file a motion for reconsideration (MR)” on the high court’s verdict. In a separate press statement, the Aboitiz group hailed the ultimate tribunal’s verdict as a manifestation of “transparent and fair bidding process that encourages competition.” On record, a corporate entity of the Aboitiz group – the Therma Power Visayas, Inc. (TPVI) – was the original highest bidder in the Naga plant’s privatization for a tender of P1.089 billion. Nevertheless, the “right to top” in the bidding terms permitted SPC Power to surpass that offer with a 5.0-percent premium relative to the land-lease agreement (LLA) that is linked to the Asset Purchase Agreement (APA) in the privatization deal.

This prompted SPC Power to make the final offer of P1.14 billion that merited the turnover of the asset to it by seller Power Sector Assets and Liabilities Management Corporation. Aboitiz Power stressed “we believe TPVI won the bid,” with Business Unit head Benjamin A. Cariaso Jr. noting that “had TPVI not participated, the government would have sold its asset at a much lower price.” The company further claimed that the award of the facility had been done “hastily” despite “the unanswered issues and the Supreme Court case questioning the validity of the right-to-top provision.” PSALM, it was gathered, is currently studying its next step on the SC ruling as well as on any option it could take in case this setback on the facility’s divestment would not be resolved. The ownership changeover for the Naga plant was effective September last year. It was among the last assets privatized under the management of former PSALM president Emmanuel R. Ledesma Jr.

Tongonan geothermal plant outage pulls down EDC income to P7 billion http://www.mb.com.ph/tongonan-geothermal-plant-outage-pulls-down-edcincome-to-p7-billion/#iB444vuTDh2qDq43.99 The nine-month consolidated recurring net income of Lopez-held Energy Development Corporation (EDC) had been pulled down 10 percent to P7.0 billion in the three quarters from P7.8 billion because of outages experienced at its Tongonan geothermal power plant. Factoring in non-recurring items though, the company has emphasized that its consolidated net income attributable to equity holders of the parent firm had been at P5.9 billion, slashed by a significant 43 percent from last year’s P10.4 billion. The decline in revenues from the Tongonan facility’s interrupted operations had been compounded by reported higher operating expenses of the company; and income tax payments due to its hydro plants. “The decrease is mainly due to the lower output of the Tongonan plant resulting from the unplanned outage of a 37.5MW (megawatt) unit early in 2015,” the company has expounded. EDC further logged jacked up operating expenses “largely spent on typhoon resiliency works, and the commencement of income tax payments of the hydro

unit Pantabangan-Masiway following the expiration of its income tax holiday last April 2014.” On the other factors waning its profitability, the Lopez firm has cited the heftier foreign exchange losses reaching P1.2 billion over the nine-month period compared to last year’s leaner P0.2 billion. It similarly indicated “the absence of any impairment reversals this year,” whereas last year, the company booked P2.0 billion of such item on its Northern Negros power facility. EDC president and chief operating officer Richard B. Tantoco said the company will “continue to proactively invest in both typhoon resiliency and equipment upgrades to increase output, improve reliability and boost the energy and cash generation of our power plants.” Revenue-wise, the company had been on a more favorable pace, having logged P25.3 billion during the financial review period. That had been P2.3-billion jump or an equivalent 10-percent hike from last year’s P23.0 billion. It explained that “the increase was largely on account of higher energy sales coming from the newly-rehabilitated BacMan (Bacon-Manito) power plants.” EDC added that the contribution of the BacMan facility to the top line had been P1.2 billion; while that of the re-commissioned Nasulo geothermal plant was P0.6 billion. The feed-in-tariff supported 150MW Burgos wind plant of the company also raked in revenues amounting to P1.3 billion from January to September this year. Tantoco has emphasized that the completion of the uprated Laoag-San Esteban transmission will enable their Burgos wind farm to reach up to 75 percent of targeted sales in the next six months.

Alsons nets P685M, up 19% in 9 months http://www.mb.com.ph/alsons-nets-p685m-up-19-inmonths/#pAzRkSK5c2IBJrGz.99 The higher dispatch of its diesel-fired power facilities had mainly shored up the nine-month profitability of Alsons Consolidated Resources Inc. (ACR) this year, rising 19-percent on its consolidated net income to R685 million from 2014 level of R574 million.

That was even against the backdrop of lower income logged by parent at R275 million from January to September compared to last year’s healthier outcome of R307 million. “The decline (in parent income) came from a revaluation of the dollardenominated debt registered at parent level coming from the recent weakening of the Philippine peso versus the US dollar,” publicly listed Alsons has noted. It emphasized that “without this non-recurring loss, parent income would have been R474 million for the nine-month period, 54-percent higher than last year’s net income attributable to the parent.” Overall though, the Alcantara group has noted that revenue stream from its optimally utilized plants had been brisk during the review period – that was amid marked decline in electricity rates. “Despite the lower price indices used in computing tariffs for the period, net income still increased due to the higher dispatch of electricity sold by three diesel-fired power plants,” Alsons has reiterated. These generation facilities include the 103-megawatt Mapalad Power plant in Iligan City; the 100MW Western Mindanao Power plant in Zamboanga City; and the 55MW Southern Power plant in Alabel, Sarangani province.

WESM for Mindanao to be decided by next year http://www.bworldonline.com/content.php?section=Economy&title=wesm-formindanao-to-be-decided-by-next-year&id=118272 DAVAO CITY -- A decision on implementing a Wholesale Electricity Spot Market (WESM) for Mindanao will come within the first half of next year, with the island deemed ready for a power auction system given the expected surplus in supply from new coal-fired power plants. “Previously, the viability of establishing a WESM in Mindanao was dependent on our connectivity to the Luzon and Visayas grid, but now the viability shall be determined once we have (a significant) power surplus,” said Romeo M. Montenegro, Mindanao Development Authority (MinDA) Investments Promotion and Public Affairs Head, in an interview at the sidelines of the 3rd Davao Investment Conference last week. Mr. Montenegro, who is also a member of the Mindanao Power Monitoring Committee (MPMC), said representatives of the Department of Energy and the Philippine Electricity Market Corp. (PEMC) were in the city last week to hold

discussions with industry stakeholders on the possibility of a WESM implementation. The MPMC earlier asked PEMC to study the viability of a Mindanao WESM. In November 2013, an Interim Mindanao Electricity Market (IMEM) patterned after the WESM in Luzon was briefly implemented to help address the tight power supply situation on the island. However, the IMEM was suspended in early 2014 as the business community and electric cooperatives raised questions and proposed amendments to the IMEM rules, including the price cap.
Several electric cooperatives also opted to procure their own generator sets rather than buy from the market.

 Mr. Montenegro explained that the IMEM and WESM are “technically the same,” but while the former operates on the principle of deficiency, the latter works on the assumption of a surplus.

Mr. Montenegro pointed out that the power situation in Mindanao will change soon with several coal-fired plants nearing completion and the contracting capacity of the electric cooperatives indicating that there is a market for WESM.

 When the new power plants become operational, “we will be able to determine if the supply situation here will be attractive for creating the WESM,” he said.

“What is important is that there are takers in the market. There are electric cooperatives that need intermittent and unscheduled power supply and they can easily get this in the WESM,” he added. The MinDA official also noted that a WESM in Mindanao will allow electric cooperatives with excess embedded supply, such as the South Cotabato Electric Cooperative 1, to readily sell their surplus. MinDA data show that Mindanao will have an expected combined capacity of 1,920 megawatts (MW) once the committed power plant projects start operating between 2015 and 2018, enough to meet the island’s present average consumption of 1,400 MW per day with a projected growth rate of 6% annually. As of yesterday, the Mindanao grid had an available capacity of 1,470 MW and a peak demand of 1,279 MW, leaving a reserve of 191 MW, according to the National Grid Corporation of the Philippines. Meanwhile, Mr. Montenegro reiterated that MinDA is continuously pushing for the approval and implementation of more renewable energy projects as most of the power that will be made available to Mindanao in the coming years are from coalfired power plants, which he described as a “not completely healthy” situation.

Sarangani plant to help rates fall P0.60/kWh in Mindanao http://www.bworldonline.com/content.php?section=Economy&title=saranganiplant-to-help-rates-fall-p0.60kwh-in-mindanao&id=118350 DAVAO CITY -- An estimated 60-centavo per kilowatt-hour (/kWh) reduction in rates is expected in General Santos City, Sarangani province and parts of South Cotabato by next year when Sarangani Energy Corp. (SEC) starts commercial operations of the first 105-megawatt (MW) unit of its coal-fired power plant. South Cotabato Electric Cooperative II (Socoteco II) will be the main buyer of the plant’s output with a contracted supply of 70 MW at a starting price of P4.20/kWh, based on the approved purchase agreement. The management of Socoteco II and SEC, a unit of Alsons Consolidated Resources, Inc., said residential and commercial customers can expect a reduction in their electricity bills once the plant is running and the agreement is implemented. Socoteco II’s franchise areas cover the seven municipalities of Sarangani, Tupi and Polomolok in South Cotabato, and General Santos City where the present electricity rates are between P7.753/kWh to P7.901/kWh. These areas are largely agro-industrial, with fish processing and canning companies and a pineapple plantation of Dole Philippines, Inc.

The electric cooperative currently sources its supply for the average 130-MW demand from the National Power Corp. through the main grid and from diesel-fired plants, at rates higher than the power supply agreement with Sarangani Energy. SEC announced last week that it will start synchronizing its first unit with the Mindanao grid by December and commercial operation is targeted within the first quarter of 2016. The Alsons firm also announced that it will start constructing the second 105-MW unit by the second quarter of next year. All of the 210-MW capacity is already contracted by several electric cooperatives and two distribution companies in various parts of Mindanao. These include coops in Agusan del Norte, Davao del Sur, Davao del Norte, North Cotabato, Zamboanga del Norte, Zamboanga del Sur and Misamis Oriental. The private firms are Cagayan Electric Power and Light Co., Inc. and Iligan Light and Power, Inc., both in Northern Mindanao.

The Sarangani Energy plant in Maasin town will be the second to be connected to the Mindanao grid after the first 130-MW coal-fired unit of Aboitiz Power Corp.’s Therma South, Inc. (TSI), which stated operating in September. TSI also announced that it is putting online its second 130-MW unit in the first quarter of next year after encountering a delay earlier this year due to the April 5 Mindanao-wide grid problem. The TSI plant, located at the border of Davao City and Davao del Sur province, has a total capacity of 300 MW and the company plans to expand it to 645 MW.

The Sarangani and TSI projects are among those approved and implemented after the passage of the Electric Power Industry Reform Act in 2001.

PSALM leans on DOJ opinion on Naga plant’s divestment http://www.mb.com.ph/psalm-leans-on-doj-opinion-on-naga-plantsdivestment/#BFZvl9JTPc6JJu4G.99 The legal anchor being invoked by the Power Sector Assets and Liabilities Management Corporation (PSALM) on its decided privatization mode and the turnover of the 153-megawatt Naga thermal power plant to the new owner had been a Department of Justice (DOJ) opinion that was issued previously. In a statement to the media, PSALM has noted that the justice department “affirmed the legality of the ‘right to top’ the adjoining properties within the NPPC (Naga power plant complex)” as linked to the privatization of the Naga thermal plant. The asset seller firm issued this statement following a decision of the Supreme Court that voided the ‘right to top’ provision in the facility’s privatization and which had also correspondingly nullified the asset’s divestment. PSALM has insisted that “the DOJ’s confirmation was made prior to the commencement of the NPPC sale process.” The state-run firm has qualified though that it has yet to receive a copy of the high court’s ruling. The Office of the Government Corporate Counsel (OGCC) represented PSALM in the case. The new owner of the plant – SPC Power Corporation – “was granted the right to top the highest bid on the sale or lease of the properties within the vicinity of the Naga land-based gas turbine power facility.”

It explained that such arrangement will “give the winning bidder the opportunity to expand, subject to the payment of a premium of 5.0% over the highest bid on these adjacent properties.” The power plant complex in dispute is located in the vicinity of the Naga thermal generating facility in Cebu. The original party with the highest offer in the third auction of the plant was Therma Power Visayas, Inc. of the Aboitiz group but the ‘right to top’ in the bidding terms had set preference on the ‘premium offer’ to SPC Power, hence, the latter ended up acquiring the asset. PSALM has further noted that “the right to top” was provided in the land lease agreement (LLA) executed among PSALM, National Power Corporation and SPC Power in 2009.

AboitizPower says SC ruling a win for transparent bidding http://www.bworldonline.com/content.php?section=Economy&title=aboitizpowersays-sc-ruling-a-win-for-transparent-bidding&id=118352 ABOITIZ Power Corp. (AboitizPower) yesterday said it welcomed the decision of the Supreme Court (SC) to nullify the award of the 153.1-megawatt Naga power plant in Cebu to a company that topped the bid of its subsidiary for the same complex. “While we have not received the official notice regarding the Supreme Court’s decision, we are pleased with this development as this supports a transparent and fair bidding process that encourages open competition,” Benjamin A. Cariaso, Jr., AboitizPower business unit head, said in a statement. He said that the company believes that unit Therma Power Visayas, Inc. had won the bid, adding that had its unit not participated, “the government would have sold its asset at a much lower price.”
 In the statement, AboitizPower described the events that led to the dispute. The Power Sector Assets and Liabilities Management Corp. (PSALM) held the first bidding for the plant in 2013. The first two rounds were declared failed bids as only one bidder, Salcon Power Corp. (SPC), showed up. Therma Power joined the third round and won with a bid of P1.089 billion, higher than SPC’s P859million bid.

“SPC however exercised the right-to-top, and was hastily issued a Notice of Award by PSALM despite the unanswered issues and the Supreme Court case questioning the validity of the right-to-top provision,” it said. Meanwhile, PSALM yesterday issued a statement that the Department of Justice had affirmed the legality of the “right-to-top” clause in connection with the privatization of the Naga plant. It said the department’s confirmation had been made before the start of the sale process. It said SPC “was granted the right to top the highest bid on the sale or lease of the properties within the vicinity” of the Naga gas turbine power facility “to give the winning bidder the opportunity to expand, subject to the payment of a premium of 5% over the highest bid on these adjacent properties.” It added that the power plant is within the vicinity of the gas turbine facility. -- Victor V. Saulon

Domestic coal demand seen growing up to 15 million tons a year by industry group http://www.bworldonline.com/content.php?section=Economy&title=domestic-coaldemand-seen-growing-up-to-15-million-tons-a-year-by-industry-group&id=118420 ANNUAL COAL consumption in the Philippines could rise by more than twothirds to as much as 35 million tons over the next two decades, the head of a local industry group said on Tuesday. That could be good news for the country’s main coal supplier, Indonesia, and could also stimulate investment to develop local coal mines. “We’re looking at... additional (annual consumption of) 10 to 15 million tons for the next 10 to 20 years,” said Arnulfo Robles, executive director of the Philippine Chamber of Coal Mines. The country’s coal consumption soared to a record 20 million tons in 2014, while imports jumped to an all-time high of 15.2 million tons. The country is counting on dozens of coal-fired power plants under construction or on the drawing board to boost electricity supply and support an economy growing between 5% and 7% annually. That is despite a government push to reduce the nation’s dependence on coal as part of an international shift towards cleaner energy. The Philippines is heavily dependent on coal imports, mainly from Indonesia, the world’s top seller of thermal coal. Australian and Russian coal are alternatives,

but are costlier because of import duties. Annual domestic output stands at around 8 million tons, but around 5 million tons is exported as the quality is not high enough for local power plants. Mr. Robles said the Department of Energy is now encouraging power producers to build plants that can run on local coal. “That’s why we should have more local coal mining companies operating for us to be energy self-sufficient,” said Mr. Robles, speaking to reporters on the sidelines of a coal industry conference in Manila. The Philippines still has untapped coal resources estimated at about 2.4 billion tons, he said. –Reuters

NGCP reports 10th bombing of transmission tower http://www.bworldonline.com/content.php?section=Nation&title=ngcp-reports10th-bombing-of-transmission-tower&id=118508 THE NATIONAL Grid Corporation of the Philippines (NGCP) said yesterday another tower within its power transmission system was bombed on Nov. 6, bringing to 10 the total number of its towers that were hit by perpetrators the grid operator has yet to identify. In a statement, the NGCP said the bombing of the Agus 2-Kibawe 138-kilovolt (kV) line 2 in Guimba, Marawi City, came eight days after three of its towers in Patani in the same city were bombed. “While the explosion did not topple the tower, the damage it sustained caused it to lean, putting the transmission facility in a more critical condition,” the statement said. On Oct. 29, three towers along the same transmission line were bombed. Of the three, two structures were toppled. The third tower sustained damage, but was not toppled. The NGCP said it was able to fully restore the 138-kV line 2 on Nov. 9 after using temporary measures to transmit electricity produced by the Agus 1 and 2 hydropower plants to the Mindanao power grid. “We are very concerned that this situation seems to be escalating, with each incident happening progressively closely to each other,” the company said.

“With the help of the local authorities, several other bombs were found on our facilities, but these did not detonate and were safely disposed of.”

 The NGCP also said the Philippine National Police and the Armed Forces of the Philippines were “leading in the investigation and exerting all efforts” in catching those behind the bombing.

EPDP Media Monitoring Nov. 23-27, 2015

NEDA statement on third quarter GDP data http://www.bworldonline.com/content.php?section=Economy&title=nedastatement-on-third-quarter-gdp-data&id=119259 THE following are remarks delivered by National Economic and Development Authority director-general Arsenio M. Balisacan on third quarter economic data released earlier: Ladies and gentlemen, members of the media, good morning. The 6.0-percent growth in the Philippines’ real gross domestic product in the third quarter of this year is certainly an encouraging sign of a steadily growing economy. The third quarter growth is an improvement from 5.8 percent in the previous quarter and from 5.5 percent in the third quarter in 2014. Growth in the first nine months of 2015 is now 5.6 percent, making a 6.0-percent full-year growth very much likely given even better prospects for the last quarter. This makes the Philippines one of the fastest-growing major Asian economies. The country’s GDP growth was the third fastest after China’s 6.9 percent and Vietnam’s 6.8 percent. As of today, the third-quarter figure for India, another fast Asian growing country, is not yet available. Strong domestic demand fueled output growth, led by significant improvements in government spending and household consumption. The third quarter saw public sector performance improve by leaps and bounds, with government final consumption expenditure increasing from 3.9 percent to 17.4 percent. For the first nine months alone, the average government final consumption expenditure has already reached 7.2 percent, a lofty leap from last year’s contraction of 0.2 for the same period, and a 2014 full-year rate of 1.7 percent. This simply shows that the government is proving successful in its efforts to overcome the spending bottlenecks that hampered growth in the first semester.

Meanwhile, with availability of more jobs, increasing employment and income, low inflation and inflow of overseas Filipino remittances, household consumption also grew by 6.3 percent. Filipino households increased their spending in the third quarter mostly on food and non-alcoholic beverages, miscellaneous goods and services, transport, restaurants and hotels, and communication. Likewise, both public and private sector investments remained strong as capital formation rose to 8.9 percent, from the 0.2 percent contraction of the same period last year. This is largely supported by public construction which doubled from 20.6 in the previous quarter to 41.2 percent. Not far behind are private investments in durable equipment at 12.1 percent which showed strong business confidence in the country, amid slowdowns among Asian economies. However, with the global economy still weak, the country recorded a 58.8-billionpeso trade deficit, a reversal from the 7.3-billion surplus last year. As a result, net exports plunged by 906.4 percent. On the supply side, growth was driven by the services sector, which grew by 7.3 percent, with major contributions coming from trade, real estate, renting, and business activities or RERBA, and other services, particularly education, recreational activities, and hotels and restaurants. With the setback in private construction, the industry sector also grew slower, albeit an improvement in manufacturing which remained as the sector’s major growth driver. The slowdown in the construction came after five consecutive quarters of double-digit growth, hence, this may just be part of the cycle of the sector. The modest growth of the agriculture sector, on the other hand, shows the impact of El Niño, as yields and harvests for palay and sugarcane were most affected due to inadequacy of irrigation water and rain. The slight improvement in the sector’s performance is largely contributed by stronger growth in livestock, poultry, and fishery subsectors. On trade, improvements of goods and services have been robust at 13.5 percent compared to last year’s 4.7 percent. This is especially supported by increase in the importation of capital goods, and raw materials and intermediate goods, which grew at an average of 16.7 and 12.3 percent respectively, in the past nine months. These are expected to translate to more outputs in the fourth quarter and beyond, which will set the stage for the improvement of our exports by next year, given the US recovery and stimulus spending in Japan and other emerging economies like China.

This growth trajectory we are seeing will likely to continue in the fourth quarter as we expect domestic demand to still pick up during the holiday season. This, along with low inflation, low oil prices, and the anticipated effects of election spending on the country’s growth, supports this outlook. Moreover, the services sector will remain strong and investments are likely to go up due to the expected increase in disbursements. However, some risks still remain that may impede our growth potential. One is the still lingering effects of El Niño on the economy, especially for agriculture. The government has been taking measures to mitigate the impact particularly on food security and potable water supply. Another risk would be. the uncertainties that are naturally brought by an impending change of leadership, with next year’s national elections. We need to remain focused on ensuring that the economy is on the right path as political changes take place. Nonetheless, the third quarter performance and the expected acceleration of growth in the last quarter of 2015 support our optimism for continued growth in 2016. What is important is that we do not lose sight of our goals, and we know the factors that have been holding back the economy from reaching its full potential. We know that we need to continue and further deepen governance reforms and that we need to keep pushing for greater investments particularly in infrastructure and human capital development for the country to achieve rapid and inclusive growth in the medium and long-term. As we have been saying, good governance coupled with good economics will make for good-quality growth. With sound fundamentals built from relentless pursuit of governance and economic reforms, we are optimistic that the new administration will not find it difficult to traverse an even higher growth path. The economy has yet to reach its peak and full potential. We need to further speed up infrastructure development that has been neglected for so long. This would not only buoy domestic demand but also enhance our global competitiveness as we prepare for the economic recovery of the advanced economies, the resurgence of international trade, and the integration of ASEAN economies. Infrastructure and social development will entail still more government budget and even more public-private partnership for infrastructure. Our recent experience on infrastructure spending has shown us that it is not enough to just increase the money resources for infrastructure, it also requires improving our bureaucratic systems so that there is ample absorptive capacity. More investments are needed in research and development and technology to enable the agriculture, industry, and services sectors to develop significantly. We need to innovate more with respect to technology and even business processes

to connect the micro, small, and medium enterprises to the global supply and value chains for them to take advantage of growth opportunities. We need to significantly improve the country’s human capital to enable our current and future workforce to seize development opportunities here and abroad now and in the future. And a lot has to be done to generate more and better jobs and to improve the overall welfare of the Filipino families. We hope that our future leaders will also pay attention to our development history, from which a lot has already been learned. The past five years have been devoted to translating the lessons learned into concrete strategies and actions. As long as we maintain our vigilance in providing and implementing solutions to our country’s growth constraints, we can achieve much more than what has already been accomplished. Through this mindset, we can ensure that our development priorities will still be focused on providing what’s best for Filipinos. Salamat at mabuhay tayong lahat!

Mindanao power issues resurface amid repairs, emergency shutdowns http://www.bworldonline.com/content.php?section=Economy&title=mindanaopower-issues-resurface-amid-repairs-emergency-shutdowns&id=119064 DAVAO CITY -- Mindanao is again facing power supply problems after several plants were temporarily shut down, resulting in a supply reduction of about 235 megawatts (MW), not counting the supply from Therma Marine Inc. (TMI), which also shut down one of its off-grid plants. The Mindanao Development Authority (MinDA) said the shutdown of the power plants has compounded the worries surrounding the troubled Mindanao grid, which has been experiencing reduced supply due to low water levels brought about by El Niño at the two major hydroelectric power complexes, the Agus and Pulangi. As of yesterday, the Mindanao grid had a capacity of 1,157 MW, which was 212 MW short of the peak demand at 1,360 MW, based on data from the National Grid Corporation of the Philippines’ Web site. MinDA said one of STEAG State Power Inc.’s two coal-fired plants in Misamis Oriental is currently under preventive maintenance while Therma South Inc. (TSI) has temporarily closed the first unit of its newly built plant in the Davao Region due to a mechanical problem.

STEAG, whose two units have a combined capacity of 205 MW, was set to resume operations by Monday evening. TSI, an Aboitiz Power Corp. (AboitizPower) subsidiary, is still assessing the problem at its 150-MW unit, while its sister firm, ancillary power supplier TMI, which operates two power barges with a total capacity of 200 MW, is scheduled to resume operations by Dec. 1. Davao Light and Power Co. (DavaoLight), a distribution unit of AboitizPower covering Davao City and parts of Davao del Norte province, started implementing rotational brownouts yesterday. “For our franchise area, we are expecting between three to four hours in rotational interruption, although we believe the condition will improve starting tomorrow (Tuesday) if schedules are followed,” Arturo M. Milan, DavaoLight executive vice-president, toldBusinessWorld. In a statement, DavaoLight said its supply has also been affected by the reduced supply from another sister firm, Hedcor, Inc. “Sibulan hydropower plant as well has advised a reduced capability to facilitate an emergency repair of one of its plants,” the company said. Hedcor, which operates two small hydropower complexes in Davao del Sur, is supplying about 65 MW to Davao Light. Mr. Milan said the company is currently running its 40-MW standby diesel plant on a 24-hour basis and has activated the interruptible load program involving commercial and industrial consumers with their own generating sets.

Power troubles ease for Mindanao but holidays at yearend raise demand http://www.bworldonline.com/content.php?section=Economy&title=powertroubles-ease-for-mindanao-but-holidays-at-yearend-raise-demand&id=119161 DAVAO CITY -- Mindanao’s power supply situation improved yesterday with the resumption of STEAG State Power, Inc.’s full operation of its two coal-fired power plants with a combined capacity of 205 megawatts (MW), but the main grid remains 127 MW short of peak demand. An official of Davao Light and Power Co. (DavaoLight), the biggest buyer from the Mindanao grid with a contracted supply of 273 MW apart from its other offgrid sources for the 340 MW demand in its franchise areas, said customers

should brace for possible continued rotating brownouts until next month with increased demand around Christmas. “I hope there are no rotating brownouts during the holidays because NGCP (National Grid Corporation of the Philippines) has done its (preventive maintenance service). We’re just crossing our fingers,” Davao Light Executive Vice-President and Chief Executive Officer Arturo M. Milan said in an interview. The NGCP is the operator of the national grid. Mr. Milan said the company is also implementing an information drive for customers to use electricity more efficiently. “Use electricity very wisely so that you can help us during this period of very tight power supply,” Mr. Milan appealed to consumers, “We hope (the preventive maintenance) will also help prepare for the holidays, but I’m not very sure. So we just have to brace and manage the way we use electricity.” STEAG shut down one of its plants over the weekend for preventive maintenance, which was completed on Monday evening. Off-grid supplier Therma Marine, Inc., which supplies 65 MW to DavaoLight, is also currently undertaking maintenance work and is expected to be in full operation by Dec. 1. However, several other plants, including the new coal-fired power plant of Therma South, Inc. (TSI) and one of the hydropower plants of Hedcor, Inc. are currently on emergency shutdown. Mr. Milan said the period to June 2016 will be difficult for Mindanao, which relies on hydropower for more than 50% of its supply, due to the prevailing El Niño. “We really have to brace for the effect of this (El Niño), especially in the water level of our hydros Angus and Pulangi. So we just keep on praying that Mindanao will experience regular rainfall to replenish our water (in the) hydropower complexes,” he said. Mr. Milan is also hopeful that the new coal-fired power sources under different stages of completion will be able to start operating earlier than scheduled. “We hope these new capacities will enter sooner so that we can really stabilize the power supply in Mindanao,” Mr. Milan said, referring to the generating plants of TSI (second unit), Alsons Power Group’s Sarangani Energy Corp., SMC Global Power Holdings, Inc., and the Filinnvest group’s FDC Utilities, Inc.

These new plants are expected to be partly or fully online within 2016. -- Maya M. Padillo

Mindanao to experience 4-hour brownouts anew http://www.businessmirror.com.ph/mindanao-to-experience-4-hour-brownoutsanew/ DAVAO CITY—A combination of scheduled and unscheduled shutdowns on three power plants supplying the Mindanao grid has denied the island more than 100 megawatts (MW) of power and forced power distributors to impose so-called rotating power failures even during peak hours. This was learned from Arturo Milan, chief operations officer at Davao Light and Power Co., who said four-hour brownouts may now be expected between 9 in the morning and 9 at night. He said the island-wide power deficiency began on Monday and was the result of repairs on the turbine units of three power-generation plants in Mindanao. Milan said the four-hour rotating brownout starting Monday should persist for the next two days following the shutdown of the coal-fired Steag State Power in Villanueva, Misamis Oriental, the power barge in Maco, Compostela Valley, and the coal-fired Therma South Inc., an Aboitiz subsidiary. “It’s more than 100-megawatt cut of our supply from the Mindanao grid through the National Grid Corp. of the Philippines [NGCP],” he told a news conference at their office in Lanang, north of downtown Davao. He clarified the brownouts would be “four hours straight” for a designated sector of its franchise area, “during peak hours, or between 9 a.m. and 9 p.m.” An NGCP advisory sent to the Davao Light clarified the shutdown of the 105-MW Steag State Power forms part of its preventive maintenance service. Milan gave assurance the Steag plant remain in good condition despite the frequent repairs on its power-generating units. The maintenance shutdown also aggravated the shutdown of a 100-mw unit of the Aboitiz-owned coal plant in Binugao, Toril, of the same province. Its managing company, Therma South Inc., told Davao Light that one of two power units “had to undergo an emergency shutdown.” “Moreover, Davao Light’s contract with Therma Marine Inc. has also decreased from 30 mw to 19 mw due to the [repair] of one of its four units with a capacity of

45 mw. The Sibulan hydropower plant as well has advised reduced capability to facilitate an emergency repair on one of its plants,” the Davao Light statement said. The NGCP has not issued any statement and did not reply to a mobile text message seeking clarification. The National Power Corp., which has operational control over the generation plants, posted only the daily water level at its hydroelectric power plants along the Agus River traversing the two Lanao provinces, and that of the lone Pulangui Power Plant in Maramag, Bukidnon. The water level at the hydroelectric plants has remained slightly above the minimum operational level and replenished mainly by rainfall the past four weeks. This development came on the heels of brownouts across most of Mindanao on November 6 after an NGCP power pylon in Barangay Guimba, Marawi City, was toppled by a bomb by still-unidentified armed men. The pylon carried high-tension wires that transmit electricity from the Agus plants to service areas across Mindanao. -- Manuel Cayon

Transport officials ordered to submit Clark plan by January http://www.businessmirror.com.ph/transport-officials-ordered-to-submit-clarkplan-by-january/ With no end in sight for the congestion at the Ninoy Aquino International Airport (Naia), lawmakers have given transport and airport authorities a January deadline for the submission of a master plan that will set in motion the use of Clark International Airport (CIA) as the substitute main gateway. This was the result of the hearing conducted by the House Committee on Transportation on Wednesday attended by officials of the Department of Transportation and Communications, Civil Aviation Authority of the Philippines (Caap), Civil Aeronautics Board (CAB) and the Department of Public Works and Highways (DPWH). Liberal Party Rep. Cesar Sarmiento of Catanduanes, chairman of the House Committee on Transportation, said discussions on the use of CIA as the alternative air hub have been going on for years already, but nothing concrete has come out to this day. “If you could assemble and meet and present a master plan, we could have it submitted to the proper authorities for immediate action,” Sarmiento told the transport officials. “To speed up matters, this committee would like the groups to

present an action master plan, considering Clark as an alternative airport to Naia to be submitted in January.” Last December thousands of passengers were stranded at Naia due to canceled or delayed flights as a result of the congestion. “We called this meeting in anticipation of December when we would celebrate the first anniversary [of the Cebu Pacific fiasco]. We welcome collecting the P52 million by way of fines. We don’t want that to happen again,” Sarmiento said. Aside from CIA, there were also proposals to develop Sangley Point in Cavite as the alternative to Naia. But Kambilan Rep. Joseller Guiao of Pam-panga said the CIA is the best substitute to Naia. He noted that the Clark Airport can accommodate as many as 4 million passengers per year. “Clark has the capacity of accommodating 4 million passengers, but right now only 1 million pass through the airport. The airport has the capacity to hold several flights,” he said. The lawmaker added that the airport can be reached with far less travel time—or one-and-a- half hours from Manila—than the two to three hours of travel to Naia due to heavy traffic along the roads to Naia. He also called on the DPWH to build a direct access road to the CIA from the North Luzon Expressway (Nlex) to cut the travel time to the airport and promote it as one of the country’s premier gateways. He earlier admitted that one problem often cited why travelers and potential clients do not consider Clark is its distance, which is exacerbated by the lack of direct access from the Nlex. The lawmaker said one important support infrastructure that must be built is a direct access route to the airport from Nlex, bypassing the busy and narrow roads of Angeles City and Mabalacat City. But CAB Chief Legal Officer Wyrlou Samodio admitted that more studies are needed before CIA can be used as an alternative to Naia. “It’s a long process we have to undergo before everything becomes feasible. Logistics-wise, it’s not easy to transfer people from one place to another. I think we have to take a thorough study, or at least prepare Clark before we transfer flights from Clark to Manila,” he said.

Caap Director General William Hotchkiss said Naia can only accommodate 40 aircraft movements per hour. “We can only accommodate 40 flights that’s the safest we can assure. If that’s exceeded, the safety factor goes down.” But Caap Supervising Air Traffic Control Officer Marlene Singson said there were days when the Naia exceeded the standard 40 movements per hour.

DOE forecasts tight power supply in the Visayas grid http://www.mb.com.ph/doe-forecasts-tight-power-supply-in-the-visayasgrid/#9gIVpHptCpEt7lXM.99 In the next two to four years, Visayas grid on its own will still be problematic when it comes to its need for capacity additions, according to the Department of Energy (DOE). In a presentation to the Philippine Innovation in Infrastructure Congress hosted by the European Chamber of Commerce of the Philippines (ECCP), DOE acting assistant secretary Patrick Aquino has indicated that from “2018 to 2020, for Visayas supply and demand, there would be a gap.” Nevertheless, he noted that the grid can benefit from its existing transmission interconnection with Luzon which is being propped with additional capacity on anticipated entry of new coal-fired and gas-fed power plants. Mindanao, he added, will have a different fate and it could teeter more on “oversupply condition” – primarily kicking in next year. If there is also a transmission system linkage between Visayas and Mindanao, he stressed that such overcapacity could be re-channeled to Visayas during tight supply periods. The most immediate problem the government has to address when it comes to Mindanao supply will be the strike of El Niño phenomenon – that is until March next year and the succeeding summer months. While new capacities will already be on-line by then, the “birth pains” of newly commissioned plants may still impact on its supply reliability as these facilities could still be very vulnerable to forced outages. Reduced water elevation at Agus and Pulangui hydro plants will likewise continue to distress generation outputs, which conventionally is still a major supply source for the grid.

Recent studies cast for the power industry, however, portend that “the lingering years of tight power supply condition in the country will finally ease with the entry of new base load power capacities from 2016.” It has been emphasized that “the precarious power supply situation in the Philippines will improve over the coming years as the robust power project pipeline is gradually commissioned.” There had been some period of under-investments in new capacity additions in the country in the last decade because investors then preferred to funnel capital into the acquisition of the National Power Corporation (NPC) assets. That changed in the last five years as the regulatory environment for the sector had also improved over the years.

Coal plants seen to end Mindanao power woes by June 2016 http://www.businessmirror.com.ph/coal-plants-seen-to-end-mindanao-powerwoes-by-june-2016/ DAVAO CITY—Between now and June next year would be the critical period for the energy sector in Mindanao before a dramatic shift to a power-surplus regime with the anticipated entry and activation of at least four coal plants by the middle of next year, a Davao Light and Power Co. (DLPC) executive here said on Monday. Arturo Milan, chief operations officer of DLPC, said the heavy reliance of the Mindanao grid to hydroelectric source of power is seen to impact heavily on the availability of power when the summer heat would dry up the water of Lake Lanao and Pulangui River in Bukidnon. Although the rains have raised the water levels at the two monitoring stations of the National Power Corp. in the Agus River network in the Lanao provinces and the sole monitoring station in Maramag, Bukidnon, the water levels, however, have been sucking up mud that force periodic curtailments of electric supply across the island. Electric distribution companies in Mindanao have been told to brace for the same worse scenario to come by first semester of next year. Milan said that while Mindanao would expect the coal plants to come in succession late this year to the entire year of next year, their full capacities would not be coming in by the time the El Niño dry spell would also be at its peak next year.

The Aboitiz-owned coal plant in Binugao, Toril, west of this city, has began to put online to the grid its one unit of 150 megawatts (MW) and its second unit would be coming in by the first quarter next year, he said. A public PowerPoint presentation by the transmission firm, National Grid Corp. of the Philippines (NGCP), said the Toril coal plant would put into commercial operation its second unit by March next year. This coal plant is managed by the the Aboitiz subsidiary, Therma South Inc. The NGCP said that earlier last month, the solar plant in Kirahon, Lanao del Norte, was also put into commercial operation bringing in 10 MW to the grid. The Alcantara and Sons-owned coal plant in Sarangani would also begin supplying 100 MW by January 25 next year, the NGCP said. The first unit of the coal plant of the Filinvest Land Inc. in Misamis Oriental would also be connected to the grid by April, while one unit of the SMC Global Power Holdings Corp. in Malita, Davao del Sur, would be put to commercial operation by March, the NGCP added. While these new baseloads would be expected to ease another round of energy crisis, Milan said the changing target schedules and the less than full capacities in the first half would remain a critical period for Mindanao. “But after this critical period, Mindanao can now safely say that it has the excess supply that we can say as reserve power,” he said. “It’s unlike now that we are all talking about scheduling our power supply and to adapt rotating brownouts to distribute power needs rationally to our customers,” Milan added. Davao City Mayor and reported presidential aspirant Rodrigo Duterte, who was asked of his opinion about the role of the coal plants, said on Sunday that the power shortage in Mindanao would force “me to accept coal to remedy the situation.” “We cannot deny that Mindanao is really in a bad shape about electricity. So we just have to accept that these coal plants would help,” he said. The four coal plants coming in would have a combined capacity of 2,115 MW, with the Malita coal plant in Barangay Culaman accounting for slight more than half of this total with 1,200 MW. The Filinvest coal plant in Villanueva, Misamis Oriental, has 405 MW; the Alsons plant in Barangay Kamanga, Maasim, Sarangani, with 210 MW. The Aboitiz plant here has 300 MW; with a planned expansion of another additional 300 MW. These plants would cover for more than the projected peak demand of 1,711 MW

by November next year as computed by the NGCP, based on projections from the electric distribution utilities in the cities and the rural electric cooperatives in the provinces.

NGCP to file for new feasibility study on grid interconnection http://www.mb.com.ph/ngcp-to-file-for-new-feasibility-study-on-gridinterconnection/#pPbVOKY6hDCYPyRm.99 Transmission firm National Grid Corporation of the Philippines (NGCP) will seek fresh round of regulatory approval on its proposed alternative route to link up Visayas and Mindanao grids. Department of Energy (DOE) acting assistant secretary Patrick Aquino has stipulated that the new filing with the Energy Regulatory Commission (ERC) for a new feasibility study on Negros-Zamboanga Interconnection Project (NZIP) is already being firmed up by NGCP. He stressed that the original plan of Visayas-Mindanao transmission link-up via Leyte had some technical hurdles because of the very deep trench that the project may traverse. Because of that, it has been noted that the project may require trench plunge of as deep as 34 kilometers that could then bloat the project’s funding. From a preliminary cost estimate of P24-P25 billion, it was stipulated that the cost for Leyte-Mindanao Interconnection Project (LMIP) may jack up to P34 billion. The targeted completion of the LMIP should have been 2018, but with the propounded new feasibility study, project timeframes are also expected to move. Both NZIP and LMIP have been integrated in the Mindanao System Power Development Plan – so the transmission operator could have its ready alternative on the planned grid link-up. With the NZIP study, the NGCP will have to evaluate the technical parameters of the two grids’ linkage as well as re-assess the project’s cost. The link-up of the Visayas power system to Mindanao is seen as the last step to the country’s long term goal of fully connecting all three major power grids. Luzon and Visayas grids are already interconnected and such set-up has been enabling the sharing of power capacities – and had been seen beneficial especially during critical supply months at either grids.

NGCP eyes legislative option to resolve ROW conflicts http://www.businessmirror.com.ph/ngcp-eyes-legislative-option-to-resolve-rowconflicts/ The National Grid Corp. of the Philippines (NGCP) wants lawmakers to pass legislation that would criminalize the construction of permanent structures underneath the transmission lines and towers. “We do hope that Congress would support us on this so as to prevent any untoward incidents,” NGCP Spokesman Cynthia Alabanza said during a briefing on Monday afternoon. “We hope there’s legislation on this matter prohibiting the planting of trees, building of high-rise structures, and burning of waste and other materials.” The NGCP is the country’s grid operator. It legally holds the right-of-way (ROW) in the areas near and around the towers and posts. The assets are still government-owned. NGCP Operations and Assets Head Lambert Gacuya said that violations of ROW have already claimed the lives of two people in the past. He said the NGCP has not been remiss in its duties to regularly inform the public, particularly squatter dwellers, about the safety issues when building structures along the high-voltage lines. The NGCP also coordinates with local government units (LGUs) to discuss the need for local officials to remind their constituents about the effects of violating ROW. These include outage of line resulting in power interruption, hasten deterioration of structures and lines, and compromise safety of people and properties that breached the safe clearance. Despite efforts to discourage violators, many still build structures, including a barangay hall and basketball court, underneath the tower and transmission lines. The walls of the structures built by the informal settlers, added the officials, are already attached to the steel bars of the towers. Among the transmission lines affected by the ROW issues in north of Metro Manila include the Quezon-San Jose lines; Quezon-Mexico; Quezon-Duhat; Quezon-San Rafael, San Jose Hermosa; and Taytay-Malaya. The said transmission lines covers the cities of Caloocan, Valenzuela and Quezon. In the south, the NGCP has identified the problematic transmission lines. These are the Biñan-Sucat; Sucat-Araneta; Dasmariñas-Amadeo; and Dasmariñas-

Zapote. Some LGUs have enacted ordinances that criminalize the planting of trees and building of structures. Elements of the Armed Forces of the Philippines are also currently assisting NGCP in entering the properties of the uncooperative landowners to expedite restoration. But the NGCP officials said that more should be done. “ROW issues hound both urban and rural areas. Worse case that could happen is the incident in Mindanao,” said Alabanza, who was referring to the loss of power supply from the Agus 1 hydroelectric power plant due to ROW issues. NGCP reported an uncooperative landowner, Mitmug Dimaampao, who refused to allow the grid operator to conduct line maintenance and repair activities within the property. Dimaampao is the same landowner who previously barred NGCP linemen from entering the property to cut trees which obstruct the transmission lines. There were also 10 bombing incidents in Mindanao that resulted in toppled towers and posts. In Manila, Alabanza said, power outage could still be avoided should ROW violations escalate. However, what can’t be avoided is the possible spike in generation charge due to “re-dispatch of power plant.” NGCP reiterates its appeal for the public’s cooperation and warns that ROW violations along transmission lines compromise not just the safety of the people, but also the security of the power grid. The Department of Energy, for its part, said that it is enjoining all stakeholders to render support and assistance in safeguarding power facilities from any obstructions that would affect the continuous supply of electricity to all households and establishments. “We appeal particularly to the local government units and land owners to cooperate with the NGCP, the concessionaire of the national transmission lines, in resolving the transmission issues on right of way and easements,” Energy Secretary Zenaida Y. Monsada said.

PSALM settles P52.55B in outstanding obligations this year http://www.mb.com.ph/psalm-settles-p52-55b-in-outstanding-obligations-thisyear/#CsF2354X0tMY7VU2.99 State-run Power Sector Assets and Liabilities Management Corporation (PSALM) has settled P52.55 billion in outstanding obligations this year, comprising mainly

of debts and lease payments plus interest charges. The company, in a statement to the media, has noted that the debt portion amounted to P19.53 billion, while interest charges hovered at P13.27 billion. Of the total financial obligations settled, a considerable amount of P19.75 billion had been funneled to lease obligations to the independent power producers. PSALM President Lourdes S. Alzona has specified that the amount paid also included P3.0 billion worth of debt prepayments. She stressed that this is a step in keeping pace with the other half of PSALM’s mandate – which is liability management. The other one is on the privatization of the government-owned power assets. The scale of payments, Alzona qualified, had been accomplished “amidst the impact of currency fluctuations and other market forces.” The PSALM chief executive said the company was able to re-build its cash hoard following the divestment of the remaining National Power Corporation (NPC) assets that are still under its charge. “The payment for Power Barges 101, 102 and 103, which were turned over to their new owners in July this year, was the latest addition to the privatization proceeds of PSALM,” she averred. With the government-run firm’s financial liabilities swelling to P1.63 trillion in 2003, it has been noted that its debts liquidation scheme had so far slashed this now to P674.04 billion. Of the current amount, it was emphasized that P108.82 billion would account for interest charges. The company is looking forward to the divestment of the remaining power assets so it can raise more cash to pay off debts and likewise pare the universal charges that have to be passed on to consumers.

‘Tap Malampaya fund to bankroll mass production of SALt lamps’ http://www.businessmirror.com.ph/tap-malampaya-fund-to-bankroll-massproduction-of-salt-lamps/

Sen. Ralph G. Recto on Tuesday said the government should use part of the P170- billion Malampaya Fund to bankroll the development and mass production of the Sustainable Alternative Lighting (SALt) lamps. Recto made the proposal after saltwater-powered LED lamp inventor Aisa Mijeno called for financial support for the mass production of her invention. Mijeno, CEO of SALt, shared the stage with US President Barack Obama and Chinese billionaire Jack Ma of Alibaba at the recently concluded 2015 AsiaPacific Economic Cooperation summit here. Recto said the government should approach Mijeno and offer her joint-venture engagements. ”Lack of funds cannot be invoked as a reason, because clearly they’re available,” Recto said. Recto added that the government is awash with idle funds—with the P168.9billion Malampaya royalties as the biggest. Aside from Malampaya proceeds, Recto said, the Department of Science and Technology’s (DOST) P19.1-billion budget for 2016 features “grants to technology startups, assistance to inventors.” He said the Senate has called the attention of the DOST “to immediately reach out to Mijeno for the possibility of her project being given support.” The Department of Energy (DOE) will also receive P2.84 billion to bring electricity to 3,150 hard-to-reach households, according to a Department of Budget and Management briefer. On top of this, the DOE would also energize 5,400 households in off-grid sitios. “If you look at government finances, there should be no problem in finding money for these saltwater lamps,” Recto said. “You don’t even have to seek budget from Congress because some of these funds are off-budget, meaning they can be tapped without having to go through the annual appropriations route, like the Malampaya royalty remittances,” he explained. Recto was referring to the government share from the production of the Malampaya natural-gas field off the coast of Northern Palawan.

The fund posted an outstanding balance of P168.9 billion as of May 31, 2015. Since 2002, the government has received a total of P210.9 billion from the production well’s operator. Releases from this fund reached P42 billion, Recto said, citing an official Bureau of the Treasury report. Next year Malampaya remittances are projected to hit P34.7 billion. “This means, on a daily basis, Malampaya is pumping P91.7 million into the government coffers,” Recto said. The government’s “daily windfall alone is more than enough” to finance the development of SALt’s full potential, he said. “If reports are true that P20 million is what the developers initially need to jumpstart the lamp’s production, then just six hours’ worth of Malampaya would be enough,” Recto added. One saline solution-powered lamp, which can produce up to 90 lumens of light, is said to cost $20, plus $3 every six months for the replacement anode. PNA Recto said the SALT project would qualify for Malampaya funding under Presidential Decree 910, which states that the government share from the exploitation of energy resources can be used to finance energy programs. On Monday Sen. Ferdinand R. Marcos Jr. urged the government to help Mijeno.

Rules revision eyed on electricity spot market suspension http://www.mb.com.ph/rules-revision-eyed-on-electricity-spot-marketsuspension/#YHKOfZMr34l7Jsc5.99 Revisions in the rules on suspension of trading at the Wholesale Electricity Spot Market (WESM) are being crafted, to include the function of system operator National Grid Corporation of the Philippines (NGCP) on declaration of emergency events. Effectively, this will be a modification on Rule 6 of the WESM Rules on Intervention and Market Suspension. The Philippine Electricity Market Corporation (PEMC) and NGCP have set out the proposed rules revisions for stakeholder comments. Suspension of WESM’s operation is generally anchored on three major conditions as prescribed under the Philippine Grid Code (PGC). These are in

cases of: Emergency; a threat to system security; and force majeure. In the rules fortification, it has been propounded that the original provision must be corrected “since intervention is only allowed if the condition is in the extreme state.” Technically, it was emphasized that when the condition is already at extreme state, “all automatic actions already failed and this would lead in system blackout.” The issuance of ‘emergency instructions’ by system operator NGCP has also been proposed to be broadened – not just to PEMC as market operator but to all WESM members. The rules also intend to clarify that the SO shall not be declaring “emergency,” but rather “issue red alert notice in case of emergency condition” as specified in the Grid Code. It was further prescribed that the reporting of such incident shall be part of the Market Intervention Report to be submitted to the Energy Regulatory Commission, Department of Energy, Philippine Electricity Market (PEM) Board and the Grid Management Committee. The rules shall also be sorted out to address “adverse material effect in the supply of electricity” as well as “market processes” due to occurrence of specified emergency conditions and system disturbances. As stipulated, the proposed revision shall cover an emergency condition wherein “a power system disturbance due to an outage in the transmission network or generating system, for which market processes, are inadequate for recovery.” Additionally, an emergency event shall constitute “significant environmental phenomenon, including weather, earthquake, floods, volcanic eruptions, tsunami, storms or fires which are likely to or are significantly affecting the power system operation in for which market processes are also inadequate for recovery.”

Meralco suits up for renewable energy venture http://www.businessmirror.com.ph/meralco-suits-up-for-renewable-energyventure/ THE Manila Electric Co.’s (Meralco) impending entry in renewable energy (RE) could lead to possible partnerships with local and foreign entities already involved in the RE space.

“Given the global developments on RE, and especially solar, Meralco is interested in exploring partnerships with local and global players,” Meralco Senior Vice President for Customer Retail Services Alfredo Panlilio said. “We think that the RE space will grow, and we want to be part of that growth,” Panlilio added without saying who the possible entities are. Renewable source of power include solar, wind, biomass, ocean, geothermal and run-of-river hydro. Meralco’s immediate interest is in solar. “We are eager to get into solar, but with an electrical engineer’s eye out for ensuring the continued safe and reliable operation of the distribution grid,” Panlilio said. Meralco Chairman Manuel V. Pangilinan has said that his group will establish a new unit that would solely focus on RE. “Pretty soon. I will say toward the end of the year,” he said. “We are looking at solar, not just utility grade solar but we will start probably with rooftops. So, for that business, we need to have a separate subsidiary and separate management.” In preparation for this, Meralco is constructing a research and development and technical-training facility that will be called Meralco Power Tech, a two-story structure that will be powered by solar and wind. The facility, which will feature the use of Smart Grid, is worth P150 million. Aside from solar panels, Pangilinan said his group is also eyeing in venturing into battery storage. “Eventually, that will be part because you have to store the power. We will just install the solar panels first,” he said. Pangilinan added that Meralco is mindful of the technological development capable of disrupting Meralco’s business model. “I think the fact that Meralco will enter the solar market signifies that we will disrupt. We think it as a future threat. So, we will be the first to disrupt ourselves because if we don’t do it, others will do it for us. So, rather than have somebody kill us, we might as well kill ourselves because it will be more fun,” he said. Nonetheless, Pangilinan said these developments will translate to shifts in the energy mix with growing penetration of renewables potentially at grid parity. “They will also lead to new ways of defining the quality of services, and of creating value for the customer, enabled by a smart or smartrer grid,” Pangilinan added.