Govt seeks nationwide power-grid interconnection

Apr 17, 2010 - Euan Paulo C. Anonuevo Reporter and Darwin G. Amojelar The Manila Times, Philippines

The government is looking at the interconnection of the Luzon, Visayas and Mindanao power grids to ensure nationwide supply, but a state-commissioned study warned this would remain elusive so long as the country's electric cooperatives remain weak.

Acting Energy Secretary Jose Ibazeta said connecting the country's three main islands through the Leyte-Mindanao Interconnection Project (LMIP) would ensure stable power supply across the country.

"We expect NGCP to undertake this project to help avert power shortages in the future," he said, referring to the National Grid Corporation of the Philippines, the private operator of the country's transmission monopoly.

At present, only Luzon and the Visayas transmission lines are connected through submarine cables. This allows Luzon to transfer excess power capacity to the Visayas when it suffers supply shortfalls.

Mindanao relies solely on local power plants, the bulk of which are hydroelectric facilities that suffered capacity shortfalls because of the prolonged dry spell.

In a study, state-run National Electrification Administration (NEA), however, said that any effort that falls short of addressing the financial straits of electric cooperatives would fail to ensure adequate power supply across the country.

Electric cooperatives' huge losses will worsen because of their poor financial position and the growing pilferage, NEA said.

The study said 61 cooperatives reported power losses greater than the 14 percent regulatory cap.

The national system loss stood at about 12.8 percent, but the government planned to cut this to 9 percent by 2010.

Based on NEA's December 2007 data, about 63 cooperatives had insufficient revenues to cover their operating and debt service costs while 32 were unable to cover even their operating costs.

The report said the cooperatives' total funding requirement for 2008 reached P13.8 billion, or way above NEA's available fund of P1.5 billion for the same year.