ERC Issues PAO to 1st Coal-fired Plant Using Supercritical Tech

THE Luzon grid will soon be assured of 500 megawatts (MW) of new power-generation capacity following the issuance of the Provisional Authority to Operate (PAO) the country’s first coal-fired power plant to use supercritical technology.

The Energy Regulatory Commission (ERC) issued the PAO on September 24 to San Buenaventura Power Ltd. (SBPL), a partnership between Meralco PowerGen Corp. and New Growth BV, a wholly owned subsidiary of Electricity Generating Public Co. Ltd. of Thailand.

SBPL will supply power for 20 years to the Manila Electric Co. (Meralco), which is Metro Manila’s only electric distributor and holds the power distribution franchise for 22 cities and 89 municipalities.

“On September 23, ERC received from NWRB [National Water Resources Board] its explanation. ERC lost no time and, hence, on September 24 the PAO was issued to SBPL,” said ERC Chairman Agnes vst Devanadera said.

SBPL’s commercial operation date was targeted at September 15, 2019, but was deferred due to questions raised on SBPL’s utilization of water rights. ERC said SBPL submitted incomplete requirements, the most important of which was the Conditional Water Permit. This, it added, was issued in the name of Meralco and not under the name of SBPL. 

“A PAO has to be issued instead of a COC [certificate of compliance] in view of the other requirements which must be submitted within a specific period of time,” said ERC.

Meralco, for its part, welcomed the ERC’s issuance of a PAO. This move, said Meralco Vice President  and Head of Regulatory Management Atty. Jose Ronald Valles, shows that ERC understands that power demand in Luzon is steadily increasing, and the conditions show that it is in dire need of additional base load capacity. 

“SBPL’s 500 MW will prove to be a significant contributor for Meralco to fulfill its mandate to provide adequate, reliable supply of electricity at the least cost,” said Valles.

SBPL’s incoming capacity will prove critical in the coming months, particularly in light of the upcoming scheduled maintenance shutdowns of Luzon’s biggest power-generation suppliers.  

Ilijan unit 1 (600 MW) is set to go on planned maintenance for 13 days on October 3 to 15, 2019, and curtail its capacity from October 16 to 18, 2019.  Sual 2 (647 MW) is also slated to shutdown for 30 days from October 19 to November 17, 2019, while the San Lorenzo Module 50 (250 MW) is scheduled to go on maintenance for five days on October 26 to 30, 2019. Masinloc 2 (344 MW) will also be on scheduled outage for 35 days, beginning October 30 to December 4, 2019.

The country’s biggest natural gas facility, Malampaya, will likewise, temporarily stop supplying fuel to generation facilities on October 12 until October 15, 2019. Malampaya supplies more than 40 percent of Meralco’s power requirement, and provides natural gas fuel for Santa Rita, San Lorenzo, Ilijan, San Gabriel and Avion. Devanadera said the ERC is mindful of the present supply situation but advises parties to do their share in securing the necessary permits from other agencies and be more diligent in their work. They should not pass on to ERC the burden of having to divine the documents they submit, she added. Prior to the PAO issuance, Energy Secretary Alfonso G. Cusi issued a statement that the agency had manifested to ERC the importance of SBPL’s timely commissioning. 

Meralco and SBPL provided NWRB with satisfactory clarifications, which NWRB accepted and accordingly withdrew its initial statements. 

“We were able to provide adequate, factual answers immediately and NWRB responded also as promptly. Now, they are privy to the urgency of the power situation at hand, and hopefully gained new insights that will help them be more circumspect in their succeeding engagements within the power industry or beyond,” said Valles.

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