Aside from state-run National Power Corporation, independent power producers like STEAG State Power Development Corporation and Quezon Power Phils Ltd. Co. are also procuring their coal supply from Indonesia.

Energy Secretary Raphael P.M. Lotilla told energy reporters that the assurance was relayed to him by Indonesia’s Minister of Energy and Mineral Resources Purnomo Yusgiantoro during a recent meeting of ASEAN energy ministers.

"Despite some market developments, Indonesian will not renege on its coal contracts with the Philippines," the energy chief said.

It must be noted that IPPs like Quezon Power and STEAG are being shielded by recent spikes in international coal prices because they were able to secure coal contracts at lower prices.

Lotilla added that part of Indonesia’s commitment is to continue supplying the needs of the Philippines because it has so far proven to be a reliable market for Indonesian coal.

The country’s level of coal importation hovers around 7.0 million metric tons or roughly 70 percent of total demand, and primarily sourced from Indonesia, China, Australia and Vietnam.

Among power facilities, it is only the 600-megawatt Calaca coal-fired plant of NPC that is designed to run on local coal, primarily from Semirara. The rest are also utilizing local coal but blended with imported high-grade quality to attain the correct calorific value for electricity generation.

As early as 2002; NPC was already prodded on securing long-term coal contracts for its IPPs so it can be protected from downside risks especially during periods of tight demand; but it noted that the transition to privatization has been preventing it from doing so.

After battered with criticisms due to its coal contracting strategy, stateowned power firm NPC announced that it is set "to further enhance its procurement procedures to make it more responsive to the demands posed by changing market conditions."

The company’s coal inventory run extremely low in April and this prompted it to buy with haste from the spot market even in the face of surging prices.

With flak thrown to the power firm from such misdemeanor, NPC president Cyril C. Del Callar said that areas for further improvement have been identified.

"Based on our recentlyheld corporate review of procurement policies and procedures, we will now formulate adjustments and refinements to make them more customer-focused," he said. (MMV)