PNOC-EDC may put up Agus 3 power plant

The PNOC-Energy Development Corp. (EDC), the geothermal unit of the state-owned Philippine National Oil Co. (PNOC), is looking at the possibility putting up Agus 3 hydro electric power plant.

EDC chairman and president Sergio Apostol said he has been talking with the National Power Corp. (Napocor) and some local government units (LGUs) on the proposed project for the past months now.

"We have had several discussions with some land owners, government officials of the province and even some officials of the Department of Public Works and Highways, to see if putting up of new Agus 3 is feasible," Apostol said.

He admitted that the project has been proposed for several years now, but nobody wants to pursue it due to some problems with right-of-way.

"We are trying to convince the Muslim people from that area to explain to them the project," he said.

At present, the Agus complex is made up of six power plants which generate electricity using water from the Lake Lanao-Agus River system traversing the provinces of Lanao del Sur and Lanao del Norte.

The complex, which is composed of Agus 1, 2, 4, 5, 6 and 7, generates more than 700 MW for the Mindanao grid.

If the Agus 3 project pushes through, it will be the seventh power plant to be constructed in the complex.

Based on the Philippine Development Plan, the proposed Agus 3 is expected to be built in Marawi. It is expected to be put in place in 2009 with an estimated capacity of 225 megawatt (MW) or three units with 75 MW capacity each.

According to Napocor estimates in 1998, the project would cost about $234 million.

A Napocor official, who requested anonymity, said Agus 3 could be an attractive project for prospective investors because it could produce cheap power since it uses water to generate electricity.

The official said one of the possible selling point for the project is that it will use the same water source as the other six existing power plants and, therefore, investors would not need further study on hydrology.

Under the Electric Power Industry Reform Act of 2001 (EPIRA), the Agus complex will be exempted from privatization of Napocor at least for the next 10 years.

Power Sector Assets and Liabilities Management Corp. (PSALM) president Edgardo del Fonso said the future earnings from the operation of the Agus complex could be used by the government in refinancing the loans of Napocor.