MANILA, Philippines - Panay Energy Development Corp. (PEDC), a power generation unit of the Metrobank Group, has entered into a long-term supply agreement with Panay Electric Cooperative (PECO).
In its filing with the Energy Regulatory Commission (ERC), the PEDC said the 25-year contract will involve the delivery of 65 megawatts (MW) of power to PECO from PEDC’s 164-MW coal-fired power plant.
PEDC’s coal-fired facility is expected to go on stream by early next year.
PEDC is a unit of Global Business Power Corp., a consortium of the Metrobank Group, Aboitiz Power Corp., Vivant Energy Corp. and Formosa Heavy Industries Corp. of Taiwan.
Based on its submission to the ERC, PEDC said the contract with PECO would assure the electric cooperative of adequate power supply for the duration of the agreement.
PEDC also claimed that the contract may also redound to lower power rates in the PECO franchise area.
The two power firms are seeking the approval of the power regulator as the contract would be beneficial to the consumers.
“The expected additional capacity from PEDC even as early as the testing and commissioning and pre-commercial operations [will] help alleviate this shortage,” they said.
In their joint application, the power companies said the contract would likely reduce the electricity rates in the PECO franchise area by P1.48 per kilowatthour.
PEDC explained that its coal facility could offer much cheaper power than the diesel power plant where PECO is currently sourcing its power requirements.
It would be noted that the Visayas grid, in particular Panay island, had been experiencing a power supply shortage.
At present, PECO whose franchise area is located at the tail end of the Visayas grid’s supply chain, is having difficulty securing its power needs and would have to rely on expensive diesel-fired power facilities.
PEDC, aside from the Panay power project, also built a 246-MW coal power plant in Toledo City, Cebu to likewise ease the power crisis in the province.