PNOC-EDC sends team to Australia to settle dispute

The PNOC-Energy Development Corp. (EDC), the geothermal unit of the state-owned Philippine National Oil Co. (PNOC), is sending an arbitration team to Australia by the end of this month to settle a dispute with California Energy (CalEnergy).

"The EDC is contesting CalEnergy’s claim that it is delivering 216 megawatt (MW) to EDC’s Leyte-based geothermal power plant," EDC chairman and chief executive officer Sergio Apostol said yesterday.

Apostol said that based on EDC data, the Tongonan integrated geothermal plants are only receiving 209 MW from CalEnergy.

"The discrepancy of 7 MW will cost EDC $3 million annually in the next six years," Apostol said.

According to Apostol, the EDC team will be composed of officials from the company’s legal, finance and planning group.

"Aside from the arbitration process, the group will also discuss with CalEnergy some minor issues such as maintenance cost and outage situation," Apostol said.

EDC entered into a 10-year built-operate-transfer (BOT) contract with CalEnergy for the Tongonan integrated power projects, which have an aggregate capacity of 707.75 MW.

CalEnergy built phases II and III of the Tongonan geothermal facility, with 209.39 MW and 385.89 MW installed capacities, respectively.

The Tongonan II power plants which were commissioned in 1996, export electricity from Leyte to Cebu via a submarine cable while the Tongonan III, which started commercial operation in 1997, transports power from Leyte to Luzon.

CalEnergy serves as an operator of the Tongonan power plants which converts the steam from the geothermal fields of EDC into electricity.

The EDC then sells the electricity produced by the Tongonan power plants to the National Power Corp. (Napocor).