Mindanao power shortage solution musn't spur higher rates

The financial viability of the Leyte-Mindanao Interconnection Project (LMIP) as a key infrastructure that could remedy the power shortage in Mindanao should not be the cause of higher electricity rates, the Department of Energy said over the weekend. LMIP is now the focus of a study to be commissioned by the National Grid Corp. of the Philippines to see if it will be viable to finance. “If it can be done, we should do it, in the scheme of things in the future, you want the flexibility to be able to move power to wherever you need it," Energy Secretary Jose Rene Almendras told reporters in an interview. “I don’t know how much it’s [going to] cost. I don’t want the price of electricity to go up because we will build that, and somebody’s [going to] pay for that," he said. But he said he expects the National Grid to include LMIP in its grid development plan that would be approved the Energy Regulatory Commission (ERC). The National Grid intends to include the P10-billion LMIP in the Transmission Development Plan. The project should be a part of the long-term solution to the power shortage in Mindanao, National Grid president and CEO Henry Sy Jr. said in a press briefing also over the weekend. “We think that is one of the long-term solutions. We can have a study for that. Right now, were just going to study," he said. “I have to discuss with the Chinese partners," he said. “Somehow we have different points of view but only the study can resolve that. But [the] study takes money also," he said. Sy-controlled One Taipan Holdings Corp. bought out Monte Oro Resources holdings — led by businessman Enrique Razon — in the National Grid that the consortium now consists of State Grid of China (40 percent), Monte Oro Grid Resources Corp. (30 percent), and Calaca High Power Corp. (30 percent). On January 15, 2009, state-owned National Transmission Corp. (TransCo) officially turned over the management and operation of its nationwide power transmission system to the National Grid in a 25-year concession. LMIP was a crucial element in the country’s power supply system — one of TransCo’s priority projects before NGCP took over last year — to complete the country’s grid loop. The interconnection project was originally designed as a 250-kilovolt, high-voltage density, cable-bipolar link with a total transfer capacity of 500 megawatts that included a 455-kilometer overhead line and a 23-kilometer submarine cable with a maximum depth of 1,000 meters below sea level. The project was designed to start at the existing Ormoc Converter Station in Leyte and terminates at the Kirahon Converter station in Northcentral Mindanao via Southern Leyte and Northeastern Mindanao. —JE/VS, GMANews.TV