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LOOKING
to address the need for additional power supply in the
Visayas grid by 2011, the Energy Regulatory Commission (ERC)
recently approved the power supply contract (PSC)
entered into by the consortium of Korea Electric Power
Corp. (Kepco) and Salcon Power Corp. (KSPC) and the
Negros Occidental Electric Cooperative Inc. (Noceco).
In the
ERC Order posted in its web site, based on the contract,
KSPC will build, own and operate two units of
100-megawatt (MW) fluidized bed combustor boiler
coal-fired baseload power generation facility in Naga,
Cebu, to supply power to its contracted customers.
The
approval of the PSC was deemed as a prerequisite before
KSPC can commence construction of the plant.
Noceco
currently sources its supply from the National Power
Corp. (Napocor), with its requirements projected to
increase in demand in Negros by 2011.
ERC
noted that Noceco’s annual contract quantity shall be
140.7 million kilowatt-hours; with 87.6 million
kilowatt-hours (kWh) per year from KSPC and 53.1 million
kilowatt-hours per year from Napocor.
Under
the agreement, Noceco will pay KSPC P4.30/kWh—similar to
the Time-of-Use rates of Napocor—which shall be subject
to adjustments based on fuel costs, foreign exchange and
local and foreign consumer price indices.
ERC
noted that KSPC’s project is estimated to cost $416.5
million, of which 70 percent will be sourced from
lenders and the balance of 30 percent will be sourced
through the equity from Kepco Philippines Corp. (Kephilco)
and Salcon Power Corp. (SPC).
Kephilco
shall invest $75 million, or 60 percent, of the equity
and SPC shall contribute $48 million, or 40 percent.
The
project shall be funded through project financing, and
if project financing cannot be availed, Kepco—Kephilco’s
parent company—may even extend corporate financing
subject to a guarantee fee equivalent to 2.5 percent of
the amount financed.
In a
recent study tour at Kepco’s headquarters in Korea,
Kepco officials told journalists they are set to start
the construction of the proposed 200-megawatt coal-fired
power plant in Naga,
Cebu by year-end.
“We are
currently preparing to build the new merchant power
plant in Cebu area, which we intend to start building by
the end of this year,” Kyong Goo Hur, Kepco Asia
Business Department director general, said.
A
source, privy to the project but who requested
anonymity, earlier said Kepco targets to issue the
tender for the construction of the Cebu plant as soon as
it secures ERC approval of its first bilateral contract
with Noceco.
The
proposed contract with Noceco includes the supply of
power to the said electric cooperative at P4.30 per
kilowatt-hour for 10 years. The source said that they
are also in the process of signing contracts with other
off-takers or electric cooperatives, which also require
ERC approval.
The
source stressed that without the bilateral contracts,
Kepco cannot push through with the project.
Kepco’s
Philippine operations include the Kepco Philippines
Corp. (Kephilco), which operates the 650-megawatt Malaya
Thermal Power Plant in Barangay Malaya, Pilillia Rizal;
and the Kepco Ilijan Corp. (Keilco), which operates the
1,200-megawatt Ilijan Combined Cycle Power Plant in
Ilijan, Batangas. |
