DOE allows APEC to buy cheaper power

By Mar S. Arguelles

The Department of Energy (DOE) over the weekend has issued a temporary power supply agreement for the Albay Power Energy Corporation (APEC) to prevent the looming power hikes in Albay due to the overexposure to the power spot market.

With the issuance of an Emergency Power Sales Agreement (EPSA), APEC will be allowed to look for other power suppliers to provide electricity to APEC at a lower price from that given by the Wholesale Electricity Spot Market (WESM), Albay 2nd District Rep. Joey Salceda said on June 27.

Salceda said the request for EPSA approval was granted and the DOE will issue on Tuesday, June 29 a certificate of exemption from Competitive Selection Process (CSP) to APEC for six months.

Salceda in an interview said the CSP would allow other power suppliers to participate in the bidding of APEC’s power supply requirements of 40 MW at full demand.

The CSP will allow other power generators such as Aboitiz and the EDC (Energy Development Corporation) to participate in the bidding process.

He said given the EPSA, the lone power distributor in Albay can buy its needed power requirement from other suppliers at P6.70/KWH instead of the P13.47/kWh at the WESM.

“This would mean that electricity prices will not just go back to P9.40 from the current P13.20 to as low as P8.40 for July billing. This intervention will keep the lights on in Albay, and possibly lower prices, the six months period would allow APEC to solve more structural issues,” Salceda said.

In his letter to Energy Secretary Alfonso Cusi, Salceda said “APEC is simply overexposed to the spot market, whose intent is really to fill up supply deficits, not be the main source. We need to fix the power supply contracts of APEC,”

Lesley Capus, head of APEC Institutional Relations and Customer Support Department, said “We gladly welcome this development since this would be a great economic relief for both APEC and our 207,597 customers in Albay. Consumers are facing severe difficulties in paying their power bills brought about by the increase in the price of electricity supply we are purchasing from the Wholesale Electricity Spot Market (WESM).”

He said, the DOE on May 27 has denied the request of APEC for an EPSA with San Miguel Energy Corporation (SMEC) for the period Dec. 26, 2020, to Dec. 25, this year, citing technical issues with regard to the CSP.

Capus said the average price under the EPSA is P 5.4750/kWh compared to the average WESM price of PHP/kWh 6.8513. Currently, WESM price is at P 12.84/kWh compared to the San Miguel Energy Corp. (SMEC) price of P 6.70/kWh.

Capus said “without a signed EPSA, we are left to purchase the 40MW energy requirement of Albay from WESM, which current market price is expensive due to the increase in Luzon power demand and the simultaneous generation plant outages resulting in tight supply conditions in the Luzon grid.”

He said that based on WESM prices APEC would be charging effective this June P13.9/kWh in mainland residential consumers, P8.8/kWh in island residences. For Commercial – P12.9/kWh for low voltage (mainland) and P8.2/kWh (island).