The Aboitiz group is pushing through with the expansion of its Mindanao coal- fired power facility, a top company official said.
Aboitiz Power Corp. president and CEO Erramon Aboitiz said “it’s something we continue to look at.” But Aboitiz admitted that it is re-assessing the cost of the expansion amid the impending impact of the global financial crisis.
“(We have to) look at the cost of plant,” the APC executive said, adding that another concern they have to consider is the prevailing rates in the Mindanao grid.
“Because the grid rate in Mindanao is P2.30 per kilowatthour (kwh) but we have to sell power at P4.50 and it’s difficult to sign up new contracts (because of the high rates),” he said.
Another major obstacle in the project, he said, is the electric cooperatives’ hesitance to enter into a long-term contract which may result in a bigger problem like power shortage in the area.” The problem is if they (ECs) don’t sign up, they might have shortage of power, the same thing with Cebu, now they have brownouts and the cost of power is more expensive,” he said.
He said the contracts with ECs will also determine the viability of the expansion project. ”So until we get at least 50 to 60 percent of plant capacity, we may be able to proceed with the project,” he said.
In the middle of last year, APC said it was willing to spend about $460 million to increase by 100 percent the capacity of its 232 megawatt (MW) Mindanao coal-fired power plant at the Phividec Industrial Estate in Misamis Oriental, Northern Mindanao.
APC bought a 34 percent share in STEAG State Power Inc., owner of the Mindanao coal facility from Evonik Industries AG for $91.9 million.