WMPC awaits ERC approval for new contract

ALSONS POWER Group’s Western Mindanao Power Corp. (WMPC) is waiting for approval from the Energy Regulatory Commission (ERC) for its new contract as its fuel supply is set to run out in the coming weeks.

WMPC, its diesel power plant in Zamboanga City, will be exhausting its fuel supply in the coming weeks and may need to stop its operations after its non-firm ancillary services procurement agreement (ASPA), which enabled it to provide power supply to the city, expired on April 25, Alsons said in a statement on Wednesday.

Ancillary services are tapped by grid operators to support the transmission of power from generators to consumers to maintain reliable operations.

Under a non-firm ASPA, power plants are not guaranteed to provide ancillary services to the power grid at all times, Alsons said.

In April 2023, the National Grid Corporation of the Philippines (NGCP) awarded WMPC a new firm ASPA, but its implementation is currently on hold pending approval from the ERC.

“Unless the ERC approves our ASPA, we will lack the necessary funds to recover our losses and procure fuel for the continued operations of WMPC,” WMPC Vice-President and Business Manager for Plant Operations Jose Luis R. Angco said.

He said the company may incur “unrecoverable losses” without an approved and acceptable ASPA, which would affect its ability to replenish its fuel stock.

According to Alsons, Zamboanga is 270 kilometers away from the nearest base load power station and without the power support that only WMPC can provide, the voltage in the city will drop to unsustainable levels. This may lead to power fluctuations or outages, especially during peak hours, it said.

“Currently, WMPC operates as a must-run unit participating in the Wholesale Electricity Spot Market. However, this setup is not sustainable,” Mr. Angco said.

He said the company may incur significant losses when the plant may be dispatched for voltage correction at a reduced rate of between P3-6 per kilowatt hour.

“We aim to continue providing the necessary ancillary services to support NGCP in ensuring a sustainable power supply in Zamboanga all throughout the year,” he said, adding the ASPA approval is crucial for the power plant to continue its operations and allow it to recover costs.

“We evaluated the WMPC ASPA earlier this morning, among others, and expect to issue our action in the next few days,” ERC Chairperson and Chief Executive Officer Monalisa C. Dimalanta said in a Viber message on Wednesday when sought for comment. — S.J. Talavera