New deal with NPC-Psalm stable power supply in VECO areas

CEBU, Philippines - Areas being serviced by the Visayan Electric Company (VECO) are assured of a stable supply of electricity this year after VECO’s agreement with the National Power Corporation – Power Sector Assets and Liabilities Management (NPC-PSALM) was extended for another year.

The new deal became effective officially last December 26, 2010 and will last until December 26, 2011.

In a statement to The FREEMAN, VECO spokesperson Ethel Natera said the extended agreement assures VECO of 155 megawatts from the state-owned power generation company. With this, VECO’s power requirement of 380 MW during peak periods is now adequately covered.

VECO thanked NPC-PSALM and the Department of Energy (DOE) for allowing a higher power supply contract from the initial 75 MW to 155 MW.

Natera said that while there may still be occasional shortages in power supply this year, the same would be at a level “more manageable to VECO.”

Of the total power requirement from VECO, 155 MW is being sourced out from NPC, a combined 105 MW is from Cebu Energy Development Corporation (CEDC) and Toledo Power Corporation (TPC), and the peaking requirement of 30 to 60 MW is being sourced out from Cebu Private Power Corporation (CPPC). VECO has also just inked a deal with Green Core Geothermal, Inc. (GCGI) for another 60MW. With this power mix, NPC remains to be VECO’s single biggest power supplier.

The presence of Green Core, a new supplier, has helped VECO maintain its green energy supply, as geothermal power is a renewable power source. On the other hand, the supply from NPC-PSALM partly comes from the geothermal fields in Negros and Leyte. VECO’s green power source accounts for no less than half of its total requirement.

Island Mode

Meanwhile, in a text message to The FREEMAN yesterday, CEDC Corporate Communications Officer Mae Melchor explained that heavy rains in Toledo have affected the company’s switchyard, which prevented transmission of power to the grid. Melchor said transmission is expected to be restored today.

“As Cebu Energy aims to supply enough power for the Cebuanos especially on the 2010 Holiday season, its 3rd 82-megawatt generating unit was synchronized to the grid last 24th of December 2010.”

“On the first day of the New Year, however, the three CEDC units of 82 megawatts each were on Island Mode due to a short circuit power at the CEDC switchyard caused by the heavy rains at Toledo City on the evening of January 1, 2011. This switchyard problem prevented the available 216 megawatts (net) of electric power from CEDC to be transmitted to the grid for the electricity consumers. CEDC plant operators are working round the clock to restore the switchyard and be able to transmit the electricity to the grid.”

Like the contracts of most of the distribution utilities in the Visayas, VECO’s contract for the Supply of Electric Energy (CSEE) with NPC expired on December 25, 2010. While it has bilateral contracts with three Independent Power Producers (IPPs), the same is not enough to cover the ever increasing needs of its franchise area. This made it necessary for the company to ask NPC-PSALM for a capacity of at least 155 MW.

Earlier, on December 6, 2010, VECO received a Letter of Agreement-Extension of Contract for the Supply of Electric Energy (CSEE) with PSALM addressed to its president Dennis A. Garcia for a supply of only 75 MW, a much lower capacity compared to its original contract of 240 MW. The revised capacity in the contract extension of 155 mw for 2011 was signed on December 23, 2010.

VECO is the second largest power distribution company in the Philippines. It is being managed jointly by the Aboitiz and Garcia families in Cebu, the company’s majority shareholders. It currently has over 320,000 customers and serves the cities of Cebu, Mandaue, Talisay and Naga plus the municipalities of Liloan, Consolacion, Minglanilla, and San Fernando. —  (FREEMAN)