18 MAY 2012
Millions lost in Iloilo City blackouts
It took only three days for an air-conditioning unit that Carlos Castells, a manager of a travel agency, bought for his 17-year-old office in Iloilo City, to break down when a citywide blackout occurred on May 2.
The intermittent power disruption, lasting from seven to 19 hours, also damaged two computer units, sending sales transactions of the Internet-dependent Amigo Travel and Tours Corp. in limbo.
Castells said he never realized that he would have to use a
3.2-horsepower generator set, which the agency acquired three years ago in the midst of brownouts occurring almost daily.
He said he had thought that the power supply, especially in the city’s business district, would stabilize when a
164-megawatt coal-fired power plant began operating in the city late last year.
“This problem has been going on for a long time and it seems that nobody is taking responsibility,” Castells said.
The May 2 blackout, which occurred from 7:52 a.m. to 1:16 a.m. the next day, highlighted the vulnerability of the city’s power system. It prompted Mayor Jed Patrick Mabilog to ask Congress to review the franchise of Panay Electric Co. (Peco), the lone power distributor.
Peco has been operating since 1923, servicing 53,000 households, commercial establishments and offices.
Consumers, however, have been criticizing the company for inefficiency, poor service and high rates. Some have even dubbed it “Patay Electric Co.,” because of the frequent brownouts.
They attributed the deplorable situation to Peco’s dependency on diesel-fed plants and the lack of a base supply generation plant in Panay.
When the coal-fired plants of Panay Energy Development Corp. (PEDC), which belongs to Metrobank Group, started operating last year, consumers’ hopes soared—until the blackout struck.
Mabilog wants Congress to review the franchise of Peco and open power distribution to other players so as to improve service at a time investments and development projects are increasing in the city.
Peco is owned by the Cacho family (70 percent) and the Lopez family’s First Philippine Holdings Corp. (30 percent).
With new players, the mayor said the city could invite Aboitiz Power Corp. or tycoon Manuel Pangilinan through Manila Electric Co., but he said no investor had formally declared interest in local power distribution.
“We have told Peco several times to improve its service and we have sent a clear message with our request for Congress to review its franchise,” Mabilog said.
Some critics of Peco had lamented that the move was long overdue.
“We have been campaigning for a long time to convert Peco into a cooperative, nonstock and nonprofit, which would reduce power rates by 20 percent,” said lawyer Romeo Gerochi, who had filed a string of cases against Peco and its officials for alleged overcharging, unauthorized charges and other irregularities.
Peco has explained that the May 2 blackout in all of the city’s six districts covering 180 barangays was a rare technical malfunction.
Luis Miguel Cacho, Peco president and chief executive officer, apologized for the power interruption in a letter to Mabilog. “We understand and know fully well the inconvenience and setbacks suffered by the citizens and businesses of Iloilo City as a result of the incident,” Cacho said.
Randy Pastolero, Peco vice president for operations, said the blackout was triggered by a “relay coordination” problem in the interconnection line between its network and that of its supplier, PEDC and Panay Power Corp (PPC), which are both subsidiaries of Global Business Power Corp.
A “flash-over” or mini-explosion in one of its five substations affected the whole network because automatic safety measures that cut off supply to all substations were triggered, Pastolero said. Efforts to solve the problem resulted in the total blackout, he added.
He also stressed the need to coordinate the activation of the safety measures between Peco and PEDC-PPC to ensure that malfunctions would be localized and isolated.
Nilo Madrid, PEDC plant manager, said the company’s system automatically shuts off its supply to Peco when the latter’s system malfunctions to protect its plants.
Peco’s own automatic safety measures could have been slower to react, he said, and thus caused the blackout.
Madrid said a relay line had already been installed to prevent the recurrence of the incident. PEDC-PPC is also waiting for results of a comprehensive study to improve the relay coordination within its system and with Peco.
Both Peco and PEDC-PPC have declared that power supply is stable. Demand is at a maximum of 83 MW during peak hours, especially around 2 p.m. PEDC’s coal-fired plant supplies 65 MW to the city while PPC’s diesel plant accounts for a minimum of 15 MW.
Pastolero said PPC supplies more electricity when needed.
PEDC could still provide an additional 30 MW, which would meet the city’s energy needs until 2014 even with additional investments, Madrid said.
Pastolero said it was unfair to call for a congressional review of the company’s franchise. Services have improved, he said.
He said the company had started implementing a P240-million development and upgrading program that would be completed in the next four years.
The program includes procurement of additional and more advanced equipment and facilities.
Under the Electric Power Industry Reform Act, power transmission and distribution are “natural monopolies” with only one franchise given in a particular area, Pastolero said. Peco has a 25-year franchise granted by Congress in 1994, which will expire on 2019.
Ma. Lea Lara, executive director of the Iloilo Business Club, said the brownouts had resulted to millions of pesos in economic losses, affecting many banks and service-oriented businesses.
She said the move to review Peco’s franchise is up to the government and officials.
“But at the end of the day, we just want good service,” she said
Read article source in Inquirer.Net, May 18, 2012