Aboitiz plant disconnects from Meralco’s network

The 242-megawatt Therma Mobile, Inc. (TMO) plant of Aboitiz Power Corporation has physically disconnected from the load network of Manila Electric Company (Meralco) on June 3 (Wednesday), as there had been no power supply agreement (PSA) that could bind their business relationship.

Following the disconnection process, the Aboitiz firm indicated in its disclosure to the Philippine Stock Exchange (PSE) that it also de-registered as participant in the Wholesale Electricity Spot Market (WESM) effective July 15 this year.

Subsequently, the company emphasized that its TMO bunker-C fired diesel power generating assets in Navotas will have to be on “reserve shutdown in the absence of a power supply agreement duly approved by the Energy Regulatory Commission.”

Aboitiz Power said it already sent notices to WESM operator Independent Electricity Market Operator of the Philippines (IEMOP) and its governing body Philippine Electricity Market Corporation.

At the same time, it said that relevant agencies –primarily the Department of Energy (DOE) and ERC – had thus far been apprised on such development; as well as other relevant stakeholders like the National Grid Corporation of the Philippines.

This is the second time that TMO had physically delinked its power facility from the Meralco system

– the first instance was in February 2019 for the same reason that their PSA had not gotten regulatory nod.

When summer supply tightening was earlier projected for Luzon grid this year, Energy Secretary Alfonso G. Cusi prompted Meralco and TMO to discuss on prospective capacity contracting; as the latter’s capacity had been targeted to beef up Meralco’s supply in case plant breakdowns will happen in Luzon as demand peaks.

But then the coronavirus pandemic happened; and that distorted all supply-demand assumptions. As a matter of fact, demand plummeted to a level that had been unprecedented in the sector’s history; especially at the enhanced community quarantine (ECQ) phase of the coronavirus pandemic.

The extreme supply tightness feared during this year’s summer months never came; and that visibly put Meralco’s supply portfolio on correspondingly safe level – without it needing to resort to emergency procurement of additional power supply.

Aboitiz Power previously stated it was planning to transfer two of its TMO power barges in Navotas to Visayas to cater to that grid’s ancillary services needs. The transfer plan was initially targeted this year, to start with the installation of components such as mooring and connection facilities.

Ancillary services would refer to the power supply as well as reserves that the system operator NGCP will need so it can reliably and efficiently serve load customers. That power supply is generally procured from power generators.

The TMO facility comprises of four power barges that it originally acquired from the government-run Power Sector Assets and Liabilities Management Corporation (PSALM) in 2011.