MANILA, Philippines - Alcantara-owned Conal Holdings Corp. (CHC) has signed a memorandum of agreement (MOA) with South Cotabato II Electric Cooperative (Socoteco II) for the supply and distribution of electricity from its 200-megawatt (MW) Kamanga coal-fired power plant in Sarangani.
CHC said they would initially operate the plant at 100-MW capacity by 2012 and expand to 200 MW within 24 months.
The company expects to secure its environmental compliance certificate (ECC) from the Department of Environment and Natural Resources (DENR) within the year and finish the construction of the proposed power plant in 40 months.
Last year, CHC announced it will begin construction of its proposed multi-million dollar power plant project as soon as it is granted an ECC.
Under the terms of the agreement, CHC committed itself to supply electricity to Socoteco II “at a maximum rating of 100 MW commencing on or around the third quarter of 2012.”
The terms and conditions of the power supply contract, however, will still have to be negotiated by both parties when CHC begins generating electricity.
Socoteco II general manager Rodolfo Ocat said they would likely face a shortfall in power supply by 2012 if the current demand for electricity continues on the uptrend.
Socoteco II holds the franchise for power distribution in Sarangani, Gen. Santos City and some parts of South Cotabato.
Ocat said the area covered by their franchise is already using up to 100 MW of supply from the National Power Corp. and Alabel-based independent power producer Southern Philippines Power Corp.
CHC chief executive officer Tirso Santillan said the MOA is just but one step towards ensuring continuous supply of electricity to the Socoteco II franchise area.
“We hope to accomplish this with the signing of a power sales contract,” he said.
Santillan said electricity consumers in the Socoteco II franchise area will benefit from reduced power cost when their power plant becomes operational.
“By embedding CHC to the existing power lines of Socoteco II, we can immediately reduce electricity bill by doing away with the transmission and systems loss costs,” he noted.
Last year, the average transmission cost registered within the vicinity of P1.42 per kilowatt-hour while the systems loss was at P0.60 per kilowatt-hour.
Another power utility firm, Aboitiz Energy Solutions, warned that Mindanao will experience a shortfall of 84 MW next year if it will have to meet the 13-percent reserve capacity required by the industry.
The Aboitiz firm further said it is projecting an annual growth of 5.7 percent in demand starting next year.