Kepco promises ample, low-cost power supply

Kepco-SPC Power Corporation assures the public of reliability of supply and low power rates once the power generation company goes into full operation three years from now.

Kepco, which is currently constructing a coal power plant in Naga City, made such guarantee following a statement issued by the Visayan Electric Company for the former to update its pricing formula as it is already outdated.

Veco chief operating officer Jimmy Aboitiz recently announced in a press conference that the power distribution firm is interested to seal a bilateral contract with Kepco, as long as the latter would made adjustments in their pricing formula.

According to Aboitiz, Veco is willing to negotiate with Kepco in sourcing about 40 megawatt power, “but they have to be competitive.”

Kepco-SPC executive vice president and chief executive officer (COO) Atom Henares on the other hand said that low cost and reliability of supply are among the benefits once power from the clean coal power plant in Naga flows through Veco power lines in Metro Cebu starting February 2011.

Henares said the KSPC Cebu Power Plant is embedded in the VECO franchise area. Thus, whatever the ups and downs in the cost of the dollar and coal Veco and its customers will save approximately P1 per kilowatt-hour in transmission charges.

Kepco welcomes that interest of the Aboitiz-led company Veco, to get power supply from the plant, as this will benefit the Cebuanos who are dependent on Veco in their electricity needs.

“Power generation is very capital-intensive a large part of the project cost is the cost of capital. Because Kepco is one of the largest electric power companies in the world, it can finance the plant at a much lower cost compared to that of the Philippine Government,” Henares stressed.

With this, Kepco is assuring Veco and its growing 290,000 consumers of the reliability of power supply, once the plant will be fully completed.

 “KSPC agrees that Veco should buy from several power providers to diversify its sources and ensure reliability. With over 60,000 MW of power generation capacity, Kepco has a world class record in efficiency and reliability,” Henares explained.

He further emphasized that KSPC plant is being built by DOOSAN, one of the biggest power plant builders in the world.

 “Since the Garcia and Aboitiz families are shareholders in both Global Power and Veco, it is in their and the public interest to make sure that pricing of power between the affiliated companies is reasonable and fair. Sourcing power from KSPC will provide the public with a price to benchmark the affiliated companies’ power rates,” he said.

Besides, he cited that the KSPC project extensively used public bidding in all its activities from the purchase of the power plant to the sourcing of fuel. This “therefore ensures low cost and market driven pricing.”

According to Henares, the delay in the KSPC project was partly due to the time it took for the project to obtain ECC approvals.  This took awhile because KSPC is first to use modern clean coal technology. 

He said, “KSPC already has signed ECC, EPC and Final Procurement contracts.  It will definitely start operations on Feb 2011.”