Cebu to get 200MW more power in 2010

Power players in Cebu have inked a memorandum of agreement that ensures an additional 200-megawatt power supply to address a looming power crisis in 2010.

In a power supply agreement sealed last Friday afternoon, the Korean Electric Power Corporation-Philippines and Salcon Power Corporation (Kepco-Salcon) will supply power directly to the power-generating firm, the National Power Corporation, and to the transmission firm, the National Transmission Corporation.

The agreement gives assurance that Kepco-Salcon is going to push through with its earlier plan to construct two additional 100-megawatt power plants in Naga town beginning this October.

According to Governor Gwendolyn Garcia, this unprecedented agreement also ensures that Cebuanos will not bear the brunt of any abuse of the provision on cross-ownership between power generator and distributor.

"And it sends the clear and positive signal to merchant power generators worldwide that it can be done. And we did it first in Cebu," the governor said in her State of the Province Address last Friday night.

It was Garcia who initiated the move to have all the power players sit together "to ensure sufficient, stable, cheap and reliable power supply for the Province of Cebu."

The province through the governor was witness to the power supply agreement signed by Transco president Allan Ortiz, Napocor President Cyril del Callar, Salcon chief executive officer Alfredo Henares, and Kepco President Gil-gu Lee last Friday afternoon.

Kepco-Salcon was earlier faced with uncertainty as to who is going to purchase the power it is going to generate when the Visayan Electric Company so emphasized in its bid specification that the plant capacity configuration of the participating independent power providers should be that it would be able to construct generators with a maximum capacity of 50 MW each.

This means construction of at least four 50-MW power plants to meet the power demand of Veco, in which Salcon-Kepco could not so qualify as it could only build two 100-MW power generators due to the very limited space of the property it is leasing in Naga.

Hence, the agreement sealed by Kepco-Salcon with Transco and Napocor has given assurance that the two government-owned and controlled corporations are going to purchase the power the former will generate in the event that Veco will not purchase it.

Kepco-Salcon will put up a coal power plant project worth US$270 million to construct two 100-megawatt coal-fired power plants in Naga that will use the circulating fluidized-bed combustion technology that are expected to augment power supply in Cebu by 2010 and 2011.

Of the $270 million, 60 percent will be invested by Kepco while 40 percent will come from Salcon.

Aside from addressing Cebu's power supply shortage, the construction of coal-fired power plant has been perceived to help revive the domestic coal mining industry. - Cristina C. Birondo