PANAY ELECTRIC
COMPANY, INC.
Expository Presentation
Application for Approval of
PECO – PEDC 2010 EPPA
ERC Case No. 2010-O97RC
9:00 AM, September 09, 2010, Iloilo Business Hotel, Small
Ville Complex, North Diversion Road, Iloilo City
PECO –Franchise Holder - ILOILO CITY
Panay Electric Company is the Franchise Holder
for the distribution of electricity in the City of
Iloilo by virtue of NEC License Number 158
issued on January 19, 1994 by the National
Electrification Commission.
PECO’s Franchise – City of Iloilo
PECO Serves Its Franchise Through 4
Main Substations
Substation capacity – Location
Available Capacity
10 MVA Substation – Jaro
10 MVA
25/30 MVA Substation - Mandurriao
30 MVA
25/30 MVA Substation – Molo
30 MVA
20 MVA Substation – City Proper
20 MVA
TOTAL RATED CAPACITY
90 MVA
PECO is connected to its power suppliers
through its 69 kV Sub-Transmission
(Loop) system
PECO’s Forecasted Supply
Requirement
2010
(See explanation *)
-
78.3 MW
2011
5% growth rate
-
82.2 MW
2012
7% growth rate
-
88.0 MW
2013
5% growth rate
-
92.3 MW
2014
5% growth rate
-
97.0 MW
* 2010 Load Adjusted to remove Impact of El Nino
Existing PECO Supply Contracts
1) PECO – PPC 1997 PPA - 72 MW (Diesel Contract)
This contract is for 25
Years and will end on 2023
2) PECO – GCGI 2010 (Non-Firm) – 10 MW (Geothermal)
July to December 2010
Supply Available During
Off Peak Period Only
(Cheap power but mostly
not available when needed)
Problems Encountered by PECO with
Existing PECO Supply Contracts
Considering the volatility of Diesel Prices as influenced
by world crude prices, PECO’s Generation Charge
Rate is restrictive (If this is pure diesel without low
cost NPC Supply, this is higher than P9 / kWh).
The total Diesel Plant Capacity of 72 MW is now lacking
when compared to the total load of PECO (The 78.3
MW is the load recorded at PECO’s sub-stations but
in terms of total required plant output, this is already
beyond 82 MW) This results to load shedding during
PECO’s Peak Hours (10 AM to v4 PM)
PECO’s Typical Daily Load Curve
Typical May 2010
Daily Loading
90000
80000
70000
60000
50000
40000
30000
20000
10000
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
M on
44897
43180
40894
39600
38058
37728
38036
44035
57939
68569
74944
76664
76035
80598
81973
77196
72208
64105
68888
63918
59612
58482
53514
49583
Tue
46402
43935
41712
40172
39048
38653
38406
43323
56863
67089
75921
76873
76050
80669
77049
76725
72713
65310
67505
66369
59776
57542
53668
50086
Wed
46293
43609
41369
39666
38705
38100
37666
44896
59727
66329
73336
74107
74021
78052
77789
75483
72367
64295
67107
63414
58886
56408
54247
49473
Thu
49331
46666
44015
42397
41167
40204
39043
44446
56103
69857
76487
77235
76818
80498
80337
75910
70165
64399
68334
64066
60192
57776
53870
50308
Fri
46467
44595
41904
39785
38794
38432
37185
42954
56938
68749
75777
76709
76444
77595
78607
74142
70719
63937
68214
66004
60224
57326
54032
49915
Sat
46590
44008
41349
39862
38054
36287
35350
39173
49000
60992
66610
67605
66799
69270
68554
65944
62398
59059
63523
61032
57206
54218
52125
49451
Sun
45801
43163
39897
38189
37290
35671
34248
36509
40512
48247
53558
54041
56218
57774
58476
56380
54225
53289
60620
59964
56751
54425
51419
47371
Problems Encountered by PECO with
Existing PECO Supply Contracts
Due to lack of Power Supply, PECO consumers are
now experiencing 2 hours of rotational outages
in around 6 to 8 of its 19 feeders during the 10
AM to 5 PM time slot. During emergency
shutdowns of one of the 6 units of PPC plant
number 1, these outages extend up to 9:30 PM
(Interruption report from May to August of 2010
attached to my judicial affidavit would provide
specifics of these rotational outages).
What benefits will signing a contract
with PEDC have for PECO consumers?
Signing a contract with the PEDC Coal Fired Power
Plant and getting ERC approval for the same
would bring the following advantages to Iloilo
City:
1) Lower Electricity Prices – Coal pricing is lower
than the cost for diesel generation. The impact
of Diesel price fluctuations will be greatly
reduced considering that the sister company of
PEDC, PPC, has agreed to reduce our diesel
contract from 72 MW to 15 MW. The amended
and restated PPC-PECO diesel contract is now
being finalized.
What benefits will signing a contract
with PEDC have for PECO consumers?
Furthermore, having an embedded
generator will provide savings in terms of
Transmission Charges and this will give
Iloilo City customers an edge over other
consumers relying 100% from NGCP to
connect to their suppliers.
What benefits will signing a contract
with PEDC have for PECO consumers?
2) Enhanced Reliability – Power interruptions can come
from various sources. Mostly, they are attributable to
Supply / Generation Problems, Transmission
Problems or Distribution Problems.
By introducing a new power plant with a higher
capacity and bigger generators, we will eliminate
generation tripping significantly. Also, since this
huge generator is embedded within our franchise,
we eliminate the effects of transmission faults to our
system. This is a very solid power plant only 2.5
kilometers away from PECO’s 69 kV Loop system.
What benefits will signing a contract
with PEDC have for PECO consumers?
Furthermore, PEDC is installing two units of
82 MW each at the PEDC power plant.
This reduces the risk of loosing all of the
65 MW that we have contracted
considering that there is a pro-rata
reduction provision in the PEDC contact
to all its customers during maintenance.
Procurement Process
Other options for PECO’s Power Supply
Requirements:
•
•
•
•
Green Core Geothermal Corporation
ASEA One Power Corporation
SNRE Corporation
Salcon Power Corporation
Procurement Process
Green Core Geothermal – Rates are
acceptable but the issues are a)
Reliability because of distance, b)
Timeliness of available supply since what
they can offer now is just non-firm
supply c) They cannot displace the PPC
Diesel contract and contracting with
them and maintaining the PPC Diesel
Contract would drive PECO’s prices
higher.
Procurement Process
ASEA ONE Power – Renewable source but no
real indication as to when they will start the
power plant. Also, rates are subject to
increments in transportation costs still
driven by diesel prices to a huge extent. A
major concern as well would be the sourcing
of the fuel supply, at the rate of consumption
projected during their presentation, we have
questions on the sustainability of fuel
supply. Also they could not displace PPC
Diesel. Can only provide minimal capacity
Procurement Process
SNRE Corporation – Also a renewable
source of supply that provided an offer to
PECO and actually signed an agreement
to construct a Biomass power plant in
Ingore but failed to deliver. This
agreement was signed in 2008 but never
prospered. This has limited capacity
(only for 5 MW) and apparently lacks
financing to push the project through.
Procurement Process
Salcon Power Corporation – Rates are
diesel rates even more expensive than
PPC (Sells at P 9.50 / kWh). This will not
solve Iloilo City’s dependence on high
cost diesel. Also, considering the plant
location, we will have to add P 1.00 / kWh
more or less for the NGCP charges to
bring their supply to PECO. Reliability
also suffers due to NGCP transmission
limitations.
Procurement Process
After considering all offers given to PECO,
It is very clear that only PEDC can
provide higher reliability considering its
location and lower costs considering its
offer to amend and restate the existing
PPC Diesel contract from an existing
obligation of 72 MW to a revised value of
only 15 MW in consideration of the coal
contract that we signed.
URGENCY of GIVING PECO and PEDC a
PROVITIONAL APPROVAL of this
APPLICATION
The PECO – PEDC contract provides for the supply
of power on a non-firm basis from the
commissioning phase of the Power Plant which
is expected to commence on the first week of
October 2010. Providing a PA on this application
would afford PECO the chance to cover its daily
peaking requirement from the output of the
Coal Plant starting next month. This will
minimize the recurring rotational outages in the
city and will also bring down prices of
electricity.
End of Presentation