PSALM to revise power supply contracts with Mindanao off-takers

by Myrna Velasco – January 2, 2016

from Manila Bulletin

With its dwindling capacity, state-run Power Sector Assets and Liabilities Management Corporation (PSALM) has indicated that it intends to revise its power supply contracts with various off-takers in Mindanao grid.

The company, in a statement, has noted that “the contract for supply of electric energy (CSEE) of the 49 power customers in Mindanao is under review for the revision of the CSEE’s contracted demand and energy for these customers,”

psalmFundamentally, PSALM has cited that the forecast available capacity from its existing assets will just be hovering at 655 megawatts by next year.

In series of consultations with affected off-takers (capacity buyers) and customers, PSALM has discussed allocation of capacity based on their demand vis-à-vis the available capacity from its remaining generating facilities in the grid.

The state-run firm said it “convened the representatives of Mindanao power distribution utilities and large industrial customers to discuss their contracted energy and equivalent demand allocation for 2016.”

These consultative meetings, it noted, had been in consideration of “the available capacity of the remaining PSALM-IPP (independent power producer) plants versus current demands and the Interim Mindanao Electricity Market (IMEM) concerns.”

Relative to the IMEM issues, PSALM has emphasized that declaration and nomination of capacity protocol had been discussed.

PSALM also conferred with the affected stakeholders on “accounting of quantities of customers with multiple suppliers, supply from embedded generators and power billings.”

Mindanao grid will be having capacity additions from greenfield plants coming on stream next year to compensate for PSALM’s reduced capacity.

The grid’s supply may still run problematic though with the El Nino threat that could substantially de-rate the capacity of the Agus-Pulangui hydropower plants on strained water elevation.

For IMEM, the grid’s pathway is to turn that into a full electricity spot market but the stakeholders have been batting first for concrete actions and solutions on the dilemmas they have encountered in their ‘experimental market’.