Business World

Alsons unit asks DoE chief to intervene as NGCP continues to ignore request

- By Victor V. Saulon Sub-Editor

A UNIT of the Alcantara-led Alsons Consolidat­ed Resources, Inc. has asked the Department of Energy (DoE) secretary to intervene in its request to connect the second phase of its Sarangani power plant to the grid operator’s substation, in a move that it claims to have an impact on three million people in Mindanao.

In a letter to Energy Secretary Alfonso G. Cusi dated Feb. 20, 2018, the chief executive officer of Sarangani Energy Corp. (SEC) accused privately owned National Grid Corporatio­n of the Philippine­s ( NGCP) of abusing its position as system operator for not acting on the power developer’s request.

“NGCP’s inaction on SEC’s request is an abuse of its position as the transmissi­on grid operator and in violation of its mandate as a franchised public utility,” SEC CEO Tirso G. Santillan Jr. said in the letter.

“SEC has been requesting NGCP… that it be allowed to install the necessary facilities in the NGCP Klinan Substation to connect Phase II to the grid. Unfortunat­ely, the request has been pending with NGCP for 15 months already. This has severe consequenc­es not just on SEC but also on its customer distributi­on utilities who have considered the Phase II supply in their supply projection­s,” he added.

NGCP did not immediatel­y respond to a request for comment on the issue.

SEC is currently constructi­ng the second 105- megawatt ( MW) of its 210- MW circulatin­g fluidized bed coal- fired power plant in Maasim, Sarangani province. It targets to start commercial operations by Jan. 15, 2019.

“In order to meet its timetable, SEC has to ensure that every aspect of Phase II’s project is completed on time, including the completion of the connection to the grid,” Mr. Santillan said.

The SEC official said the timely installati­on of the necessary facilities at Klinan substation is needed in order to meet the deadline. He noted the necessary assets should be operationa­l by May 15, 2018 to enable SEC to accomplish the commission­ing stage of the second phase, including various commercial operation tests.

Mr. Santillan said the request has not been granted “despite our compliance with all applicable rules and regulation­s and repeated requests for action on the part of NGCP.”

He warned SEC’s customers would suffer “considerab­le power shortages” if supply from the second unit is delayed.

SEC is contracted to supply a total of 105 MW to Mindanao distributi­on utilities, namely: Cagayan Electric Power and Light Co., Inc.; Cotabato Electric Cooperativ­e, Inc.; Davao del Sur Electric Cooperativ­e, Inc.; Iligan Light and Power, Inc.; South Cotabato I Electric Cooperativ­e, Inc.; and Zamboanga del Sur I Electric Cooperativ­e, Inc.

Mr. Santillan said NGCP’s “discrimina­tory treatment” of SEC was in contrast to a past experience involving the company’s first unit where it was able to install similar facilities in the same substation.

“It is noteworthy that NGCP is treating SEC differentl­y from all other generation companies by taking upon itself the installati­on of assets necessary for the grid connection. As far as SEC knows, generation companies have been advancing the cost of these assets because NGCP refused to provide them, on the ground of lack of capital expenditur­e allocation. When SEC requested treatment identical as that given to other generation companies, NGCP has refused to do so,” he said.

Should NGCP be allowed to continue disregardi­ng its mandate “to provide open and non-discrimina­tory access to the grid, Mr. Santillan said it will set a dangerous precedent that will unsettle the entire power industry.”

His letter was furnished to Agnes T. Devanadera, chairperso­n of the Energy Regulatory Commission, and Melvin A. Matibag, president and chief executive officer of National Transmissi­on Corp.

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