Veco, consumers brace for Cebu brownouts

Monday, 19 January 2009 19:45

Visayan Electric Co. (Veco) and 15 of its biggest consumers are drafting a deal that would allow companies to use generator sets and help avert brownouts in Metro Cebu this year.

Veco chief operating officer Jaime Aboitiz said under the agreement companies will stop receiving power supply from the distribution utility at certain hours of the day when generators sets are on.

The arrangement will help Veco franchise areas save up to 40 megawatts (MWs) of power, or enough to stave off expected brownouts later this year when power supply in the Cebu-Negros-Panay grid drops to critical level.

“What is good is that companies are supportive of the plan, there is no [selfishness] in this case,” Aboitiz told reporters on Monday.

The two biggest consumers, SM City Cebu and San Miguel Corp., consumes close to 9 MW and 7 MW, respectively, and have made pledge commitment to the plan.

Other big consumers like Ayala Center Cebu, the Gaisano group and industrial users were also responsive to the proposal, Aboitiz said.

However, the Energy Regulatory Commission (ERC) needs to approve the deal.

Aboitiz believes the commission will approve the agreement on account of the power situation in the Visayas that can drop to critical levels.

Under the plan, Veco will pay the difference between regular power bills and the amount companies would incur when generator sets are used.

The plan would mean an increase in the bill of household consumers, Aboitiz admitted.

Veco computed that an average household that pays P200 a month for electricity would have to pay about P8 more.

“But this will mean there will be no brownouts, especially during times when people go home from work,” he said. “We are also asking the Cebuanos to save power a little more.”

Veco vice president for administration Sebastian Lacson said the companies will be given a fixed rate, or a premium over their bills if they run their generator sets efficiently.

“If they are very efficient then they may actually earn a little. If not, then they” would incur added cost, he told the BusinessMirror.

Veco wants the plan in place before the summer months when electric consumption goes up as people turn air-cooling units on.

The Visayas grid expects brownouts this year as no additional power supply has been identified to meet higher demand and as existing power plants age.

New power plants in the Cebu-Negros-Panay grid include the 245-MW coal-fired plant of Cebu Energy Development Corp. in Toledo City, and would be online by the first half of 2010.

The 200-MW plant of Kepco Salcon Power Corp. won’t be in operation unit 210 11. The grid consumes an estimated 900 MW at peak hours, with Visayan Electric Co. accounting for close to 350 MW.

Veco is owned by listed companies Aboitiz Power Corp. and Vivant Corp.