No firm deal on 'gas swapping' for Ilijan plant - DOE.(Business)

The Department of Energy (DOE) has indicated that the propounded "gas swapping deal" to enable the operation of the Ilijan gas-fired power plant during the summer months is not firmed up yet.

In a statement to the media, the energy department emphasized that "the possible arrangements cannot yet be confirmed," although the agency stressed that "the DOE continues to call on everyone concerned to cooperate in the common effort to assist the consuming public."

The DOE added it "continues to encourage power sector stakeholders to work together to explore all measures that could help consumers, particularly in Luzon, by ensuring adequate supply of power, during the forthcoming summer months."

In the proposed arrangement, part of the Malampaya gas allocation for the power plants of First Gen Corporation will have to be re-channeled to the Ilijan plant of South Premiere Power Corporation (SPPC), a subsidiary of San Miguel - that way, the plant could prospectively yield additional 500 megawatts capacity to the grid during the critical period of summer.

Then the fuel void arising from that gas re-allocation will have to be plugged by First Gen via importation of liquid fuel, which the Lopez firm will then use to continuously generate electricity from its gas-fed power fleets.

During stakeholder discussion latter part of December last year, one of the key missing pieces of the puzzle that was still subject to confirmation would be the volume of gas that Malampaya field operator Prime Energy could commit within the specified period.

On the part of power utility giant Manila Electric Company (Meralco), the main concern it has been repeatedly sounding off since last month would be the cost impact on consumers - especially if the First Gen plants would be shifting utilization to more expensive liquid fuel.

A preview of the 'cost-risk' on liquid fuel shift of the gas plants already manifested in the January billing of Meralco, as that had been traced as a significant factor to the uptick in the electricity bills of consumers this month.

Apart from the remedial measures being sorted by the DOE with relevant stakeholders in the industry, there is also expectation that capacity additions from the commercial operation of new plants would shore up capacity as demand climbs when the scorching weather would hit.

On the level of the consumers, there is also that intensifying plea to embrace lifestyle change and pursue business operation adjustments by taking to heart the value of energy conservation as well as the patronage of energy efficient equipment and appliances.