Western Mindanao Power Corp. (WMPC) said fuel supply for its diesel power plant will be exhausted in the coming weeks.
This may result in power outages in Zamboanga City, the company said. WMPC said its 100 megawatts diesel-fired power plant may stop operations sans any supply ancillary services.
WMPC had a non-firm Ancillary Services Procurement Agreement (ASPA) with the National Grid Corporation of the Philippines (NGCP) which enabled the power company to provide electricity support to maintain grid stability in Mindanao and ensure a consistent power supply in Zamboanga City and nearby areas. The non-firm ASPA expired on April 25, 2024.
While NGCP awarded a new firm ASPA to WMPC in April 2023, implementation was placed on hold pending approval from the Energy Regulatory Commission (ERC).
Under a non-firm ASPA, power plants are not guaranteed to provide ancillary services to the power grid at all times.
From January to March , WMPC incurred P50 million losses as power plants holding new firm ASPA contracts received provisional authority from NGCP. In this arrangement, plants with non-firm ASPAs such as WMPC were not prioritized.
“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… Operating a diesel plant is costly.
Without an approved and acceptable ASPA, we will incur unrecoverable losses that affect our ability to replenish our fuel stock. This will force us to reduce and eventually halt our operations,” said Jose Luis Angco, WMPC vice president and business manager for plant operations, in a statement.
WMPC added since Zamboanga is at the end of a long transmission line, 270 kilometers away from the nearest base load power station, voltage in the city will drop to unsustainable levels, leading to power fluctuations outages during peak hours without the company’s services.
“Currently, WMPC operates as a must-run unit participating in the Wholesale Electricity Spot Market. However, this setup is not sustainable. We anticipate incurring significant losses after the summer season when the plant might be dispatched for voltage correction at a reduced rate of between P3 to P6 per kilowatt hour,” Angco said.
