NG to save $238M under new IPP deal

The National Government will be able to save some $238 million under a renegotiated contract with independent power producer (IPP), San Roque Multi-Purpose Hydroelectric Power project.

Energy Secretary Vincent S. Perez said the Power Sector Assets and Liabilities Management Corp. (PSALM) has approved a reduction in the capacity that Napocor will get from San Roque, thus lowering the take-or-pay payment and the electricity cost to Napocor customers.

Based on the original purchased power agreement (PPA) between San Roque and Napocor, the project can nominate up to 345 megawatts (MW).

But based on the renegotiated contract, Napocor may limit its purchase of electricity from San Roque to only 85 MW for the first four years of operation; 95 MW from year five to 10; 110 MW from year 11 to 14 and 115 MW for years 15 to 25. San Roque started commercial operation yesterday.

The proponents of San Roque also agreed to shoulder the payment of financial assistance under the ER-1-94 for the entire cooperation period which will result to another P225 million savings for Napocor. ER 1-94 provides that Napocor should give one centavo per kilowatthour of the total sales from its hydro power plants for the conservation of environment and watersheds.

San Roque Hydro power plant, located in San Manuel, Pangasinan, has a capacity of 345 MW.

The project, which is under a 25-year build-operate-transfer (BOT) scheme, will utilize the waters of the Agno River for power generation and irrigation and for flood control and water quality improvement. It is funded by the Japan Bank for International Cooperation.

The project’s proponents include: Marubeni Corp., Sithe Philippines Holdings, Kansai Electric Co. and Italian-Thai Development Public Co. Ltd.

Apart from the San Roque project, the government has realized some $850 million worth of savings by negotiating some 16 contracts with eight IPPs of the Napocor.

The government, through PSALM, has been negotiating these IPP contracts of Napocor to be able to lower the proposed universal charge of 40 centavos per kilowatthour (kWh) to be imposed on electricity end-users within the next 25 years.

Del Fonso said the savings could also bring down the duration of the imposition of the universal fee from 25 years to only 18 years.

There are at least 32 contracts that are being worked out by PSALM with 18 firms/consortia. These include: Aboitiz (Benguet, Bakun); Alsons/Tomen (Iligan City 1 & 2, Zamboanga, General Santos); Alstom (Limay Bataan A & B); Bauang Private Power Corp. (Bauang La Union); Covanta (Cavite EPZA, Bataan EPZA); Enron (Pinamucan, Subic Zambales); IMPSA (CBK); Kepco ( Malaya, Ilijan Gas); Marubeni Sithe ( San Roque); Mirant (Navotas I-III, IV, Pagbilao, Sual); Mitsui (Mindanao Barges); NIA (Casecnan); Ormat (Makban Binary); PNOC-EDC (Leyte A & B), Mt. Apo I and II; Salcon Power (Naga Complex); State Power (Mindanao Coal); Chevron-Texaco (San Pascual Co-generation); and BHEPI (Binga).