ERC approves new power supplier for Bantayan Island

The Energy Regulatory Commission recently approved the 15-year power supply agreement between Bantayan Island Electric Cooperative, Inc. and the Bantayan Island Power Corporation.

The Bantayan Electric Cooperative had chosen Bipcor, among four bidders, as its supplier of power at P5.05 per kilowatt-hour for a period of 15 years.

Last September 12, Banelco and Bipcor applied at the ERC for the approval of their supply agreement. Later on November 8, ERC held a public hearing on the matter.

Banelco is an electric cooperative authorized to distribute and provide electricity services to its member-customers in the three towns of Bantayan Island, while Bipcor is a private power producer.

Due to the rather unstable and insufficient supply of power in Bantayan Island, Banelco held on October 2003 a competitive bidding to select a power producer that will provide power to the island.

Of the four bidders, Bipcor won as it tendered the lowest rate at P5.05 kilowatts per hour, did not demand for a minimum energy off-take, proposed to install its plant near the Banelco main office, and assured the cooperative of power reliability with its 2x3MW capacity.

On June 11, 2004, Banelco and Bipcor entered into a power supply agreement, involving the latter's commitment to provide the power requirements of the former with a guaranteed net capacity of 2.7MW. Bipcor's 6-MW bunker-fired diesel power plant will comply with the Banelco need.

Currently, Banelco gets its power needs from the National Power Corporation-Small Power Utilities Group, which issued last December a notice stating that it does not have sufficient capacity to meet Banelco's increasing requirements through the years.

In approving the new power supply agreement, the ERC warned Banelco and Bipcor that they can only pass on the cost of fuel to the consumers at P0.26 liter/kilowatt hour, which is a prudent level of fuel rate.

To monitor its compliance, the ERC required the two parties to submit a monthly fuel rate consumption. - Wenna A. Berondo