By MYLA IGLESIAS

The National Power Corp. is scrambling to secure supply for its four coal power plants to avert blackouts.

Napocor is finding it difficult to buy coal and have it delivered at the correct time because of rising prices and short supply in international markets.

If the coal power plants will be hobbled, the country’s wholesale electricity market, cannot function and corporations will have to bear with higher priced energy that will have to be set by the Energy Regulatory Commission.

The government is experiencing the same problem with rice. The country needs five to six million metric tons of coal this year from 4.5 million metric tons last year, according to Cyril del Callar, Napocor president.

It has been mum in announcing how much of that has been secured by supply contracts but said that at least until May this year, coal supply has been assured.

Napocor officials said that if worse comes to worst and there will be coal shortage, it will have to tweak the energy mix, using more of hydropower and the costlier bunker oil fired plants.

The country’s four coal power plants contribute 30 percent of total capacity, All these plants need to use imported coal. Semirara coal is used by only one power plant.

The four plants are Masinloc, Calaca, Pagbilao and Sual.

Last Friday, Napocor announced that it awarded a 195,000 coal supply contract for March to May arrival at $109.50 a ton CIF.

The contract to supply coal for the Pagbilao plant was awarded to Indonesia’s PT Marsitero Prakarsa, said Juan Carlos Guadarrama, a senior Napocor official.

PT Marsitero was one of the producers that submitted financial proposals to Napocor after the latter published an open invitation to coal miners after little success in securing bids at an auction.

In February, coal prices were at record levels of around $140 per ton at Australia’s Newcastle port, a benchmark for Asia, after a series of supply disruptions in key coal exporting countries, such as China and Australia.

The Philippines buys coal from China, Indonesia and Australia.

The Sual can use only coal from China while Masinloc can use Chinese and Australian coal. Pagbilao can only use Indonesian coal . It is only Calaca that can use Semirara coal.

Napocor said that the current coal inventory, as of March 5, 2008, 116,000 MT for Luzon; and 20,000 MT for the Viasayas. A new shipment of 65,000 MT just arrived recently from China.

It will specially be difficult during summer when hydropower plants cannot be used at full capacity.

Lasse Hollopainen president of Philippine Electricity Market Corp., (PEMC) said the Energy Regulatory Commission can declare force majeure if the price of coal continue increase and if supply becomes restricted.

With this declaration, the ERC can dictate the price but the WESM cannot function. "If the hydros are not available , were 50 percent dependent on imported oil during the summer season it increase to 75 percent its really affected the prices" Hollopainen said.

The Department of Energy (DOE) has been encouraging the private sectors to put up a power plant designed to utilize the country’s abundant low rank coals as it was the cheapest of all fuels options to avert from dependent on imported coal supply.