Monday, 19 April 2010

Metrobank unit secures power contracts

Francis Allan L. Angelo
BusinessWorld
http://www.bworldonline.com/main/content.php?id=9176

ILOILO CITY -- Metrobank’s power generation unit Global Business Power Corp. has signed electric power purchase agreements with six cooperatives belonging to the Panay-Guimaras Power Supply Consortium.

Global Business Power President Jesus N. Alcordo said the new 164-megawatt (MW) coal-fired plant being built by subsidiary Panay Energy Development Corp. will supply to the cooperatives.

Panay Energy is also wrapping up negotiations with Panay Electric Co. or PECO, the sole power distributor in Iloilo City. Mr. Alcordo said a power purchase agreement with Panay Electric will be signed next month.

“We expect to sign an [agrement] with PECO early May when we have concluded our negotiations with them. PECO’s baseload demand is more than 60 megawatts,” Mr. Alcordo said.

Panay Energy signed the agreements with the Iloilo Electric Cooperative (Ileco) 1, which will buy 4 MW; Ileco 2, 10 MW; Ileco 3, 7 MW; Antique Electric Cooperative (Anteco), 7 MW; Aklan Electric Cooperative (Akelco), 12 MW; and Capiz Electric Cooperative (Capelco), 8 MW.

Aside from Mr. Alcordo, other signatories were Global Business Power Senior Vice-President and Chief Finance Officer Jaime T. Azurin and Panay Energy Director Felipe A. Uygongco.

Mr. Alcordo said the firm expects demand for power in Panay, particularly Iloilo City, to surge when the coal-fired power plant operates.

“There is a lot of suppressed demand in Iloilo City and Panay because of high prices of power. But when the coal plant operates, which will bring down electricity rates, we expect more call centers and investments to enter the island which will cause a spike in demand for power,” he added.

Mr. Alcordo said the generation charge or cost of producing electricity will go down by at least P2 per kilowatt-hour once the coal-fired power plant goes on line later this year.

“Our generation rate in the coal-fired power plant in Cebu is even lower than the rates of the newest entrant,” he added.

Meanwhile, the Aklan Electric Cooperative or AKELCO said it expects the coal-fired power plant to bring down electricity rates and provide stable power to Aklan and its prized Boracay Island.

Chito R. Peralta, Aklan cooperative general manager, said the utility has been dependent on diesel-fired plants in Aklan which supply expensive power. The utility had contracted the biggest volume of electricity from Panay Energy, amounting to 12 MW.

“AKELCO’s peak demand is more than 33-34 MW with Boracay Island accounting for 40% of that demand,” Mr. Peralta said.

Panay Energy expects to commission the first 82-MW unit of its coal plant in Brgy. Ingore, La Paz, Iloilo City in October this year. The second unit will be “on line” three months later.

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