Still no agreement on Ilijan gas supply — DoE

A PLAN to get power generators to share their gas with the Ilijan power plant in Batangas has not yet produced an agreement, the Department of Energy (DoE) said.

The so-called “gas-swapping” arrangement will require power plants controlled by First Gen Corp. to run on liquid fuel while turning over some of their Malampaya gas allocation to Ilijan, operated by San Miguel group company South Premiere Power Corp.

“At this time, the possible arrangements cannot yet be confirmed. The DoE continues to call on everyone concerned to cooperate in the common effort to assist the consuming public,” the DoE said in a statement. 

The DoE has warned that the absence of Ilijan’s output from the grid will bring power supply to critical levels by March, exposing consumers to the risk of higher electricity bills.

On Monday, the DoE said that the Luzon power grid is likely to experience 12 yellow alerts this year due to inadequate reserves. The Visayas grid is also expected to experience five yellow alerts by the second half of the year, while the Mindanao power supply is deemed adequate.

Ilijan is a 1,200-megawatt (MW) plant belonging to the SMC Global Holdings Corp. group. It had a gas contract with Malampaya that expired in June 2022. Its output is deemed critical if the Luzon grid is to be adequately supplied during the dry season.

The DoE has designated May as a critical period due to the surge in demand for power during the high temperatures.

Malampaya gas is fully allocated to the power plants of First Gen.

On Monday, Ilijan customer Manila Electric Co. (Meralco) said no deal has been reached with First Gen for the reallocation of Malampaya gas to Ilijan.

Meralco received last year an offer from SMC Global Power to take up the 1,200 MW capacity of Ilijan.

Meralco has said that it is considering SMC Global Power’s offer, which will help it avoid tapping power from the Wholesale Electricity Spot Market (WESM), which typically costs more.

Sourcing power from WESM resulted in higher Meralco power bills in January, as the power distributor sourced 9% of its power from WESM, up from 7% previously. — Ashley Erika O. Jose