By Redempto D. Anda Inquirer Southern Luzon 9:48 pm | Thursday, October 31st, 2013
PUERTO PRINCESA CITY—The proposed coal-fired power plant set to be constructed in Aborlan, Palawan, received its crucial endorsement from the municipal government on Tuesday despite stiff opposition from local residents.
The 15-megawatt plant is to be built by DMCI Powers to supply the main power grid of mainland Palawan under a 15-year power-supply agreement with the local distribution cooperative, the Palawan Electric Cooperative.
Under its contract, DMCI is seeking to construct two coal-fired powered plants that will generate a total of 25 megawatts of electricity and will be fed by the company’s own Semirara coal from the province of Antique.
Opposition to the plant has been stiff, with local residents angrily protesting the project, along with a state university with a student population of about 2,000 students, whose campus is located beside the planned power plant site.
DMCI, however, has banked on the support of local political leaders to secure its permits.
The Palawan Alliance for Clean Energy (PACE), a multisectoral group formed to oppose the project, claimed that the municipal government of Aborlan “violated established procedures” in conducting local consultations as part of the local process in granting permits to environmentally sensitive projects.
“The municipal endorsement is flawed because there was never any proper consultation conducted. And all the related gatherings that tackled the issue have shown that the residents of Aborlan are opposed to this project,” said lawyer Gidor Manero of PACE.
Manero claimed that the local government of Aborlan “tricked” the anticoal groups into believing that the project would undergo continued deliberations in the committee level but convened a “special session” to pass a resolution endorsing the project after leaders of PACE left the session hall.
Marlene Jagmis, a leader of the local opposition, in her social network blog, complained that the local officials of Aborlan “made a mockery of the law.”
Henry Alcalde, DMCI vice president, dismissed the protests of nongovernment organizations (NGOs), claiming that local officials had studied the proposal before they issued the endorsement.
“They made their own study by visiting the actual coal plant site, secured articles about the coal plant and discovered for themselves that what the NGOs were saying were half-truths,” Alcalde told the Inquirer in a text message.
The proposed plant is to be located in Barangay San Juan, where it is being supported by officials who visited a similar plant in Iloilo upon the invitation of DMCI. source
SAN Miguel Corp. (SMC), through the SMC Global Power Holdings Corp., said on Tuesday it remains interested to participate in other “possible government projects,” which include joining bids for other distressed electric cooperatives (ECs).
“Yes, we are interested to join any bidding, in any possible projects. Yes, even electric cooperatives, but for now we still don’t know,” SMC President Ramon Ang said.
Ang’s statement came after Energy Secretary Carlos Jericho Petilla said any ECs which needs financial support will be presented to the private sector. Petilla mentioned that the Camarines Sur Electric Cooperative may be a candidate. “We are looking at other ECs but we don’t know the extent of their exposure. But we will present them to whoever may be interested,” Petilla said.
SMC Global Power is taking over the management of Albay Electric Cooperative (Aleco). A concession agreement was signed on Tuesday.
SMC Global Power is expected to shell out P350 million in separation payment to affected Aleco workers. Also, some P250 million will be earmarked for capital expenditure. The working capital, they said, will be determined until such time SMC Global Power starts to operate the EC.
SMC Global won the bid to take over the management of Aleco for 35 years.
SMC Global Power will not own Aleco. It will only “run and shoulder the debt and pay monthly concession fees,” Petilla said.
Aleco’s debt exposure to SMC Global amounts to P600 million.
At the ceremonial signing of the concession agreement, Ang said his company is committed to transform Aleco to an efficient and profitable EC.
“There will be a series of programs that include upgrading and constructing new substations and improvement of distribution lines. We are determined to invest in people by providing technical training to field personnel and also by improving their customer service,” Ang said.
Early this month, Albay Gov. Joey Salceda said SMC needs to spend at least P1 billion to rehabilitate the debt-ridden electric cooperative.
“At least P1 billion is needed to rehab or create a new organization for collection and systems improvement,” Salceda said.
“[Aleco] would be better off in the hands of the private sector. Today Aleco’s system loss is 24 percent compared to the cap of 13 percent,” Salceda said. “What happened to Aleco is its failure to collect and failure to bill. There’s also the systems losses because the equipment was obsolete,” Salceda said.
Nonetheless, SMC, he said, is expected to generate revenues of about P600 million annually from taking over the management of Aleco.
SMC Global has become one of the largest independent power generation companies in the country with an installed capacity of 2,545 megawatts (MW) to date.
The company had a 17-percent market share of the power supply of the national grid and 23-percent share of the Luzon grid as of end-2012.
The conglomerate plans to install a total of 3,000 MW of new capacity over the long term with new power plants that will be based on clean coal technology. source
FIRST GEN Corp. has successfully raised another $50 million through a reopened bond issue, the Lopez-led firm said in a disclosure to the bourse yesterday.
FIRST GEN has raised another $50 million from its 2023 bonds. -- www.energy.com.ph
“Further to our earlier disclosure on the reopening of First Gen’s… Regulation S US dollar bond issue, please be informed that the company has issued an additional $50 million…” the disclosure dated Oct. 25 read.
Details of the issue price were not immediately available.
The additional notes were issued under the same terms and conditions of First Gen’s outstanding $250-million 6.5% senior unsecured fixed-rate notes due on October 2023, it continued.
The reopening of an existing bond issue entails the sale of additional amounts of a previously issued bond, with the maturity date and interest rate of the original debt but with a different issue date and price based on prevailing market yields.
On Oct. 10, First Gen reported that it closed the $250-million 10-year bond offer intended to fund investments in power projects and corporate spending.
The company said the bonds, traded on the Singapore Exchange Securities Trading Ltd., would mature on Oct. 9, 2023.
First Gen tapped Deutsche Bank, HSBC and JPMorgan as joint lead managers and joint lead bookrunners for the transaction, while BDO Capital & Investment Corp. and Development Bank of the Philippines were domestic lead managers.
First Gen had said in May that it was planning to tap the debt markets to fund the second phase of its San Gabriel natural gas power project in Batangas.
The company then said it was considering all options, including syndicated loans and issuance of dollar or peso bonds.
The San Gabriel project, which involves the construction of a facility with a total capacity of 1,300 megawatts (MW), will be carried out in three phases beginning this year at a cost of $1.4 billion.
First Gen is the holding company for the Lopez Group’s power generation businesses. It owns and operates several power plants, with a total installed capacity of 2,763 MW.
The company saw its net income sink 30.65% to $116.042 million in the first semester from $167.32 million in the same period last year.
Revenues fell 4.22% to $984.615 million from $1.028 billion, while the cost of sale of electricity dropped 5.5% to $651.706 million from $689.666 million.
First Gen shares shed 12 centavos or 0.73% to close at P16.24 apiece yesterday from P16.36 on Friday last week. -- Claire-Ann Marie C. Feliciano source
Energy services company (ESCO) Cofely GDF Suez said that they will be funding about five to eight energy efficiency projects in the Philippines every year in line with their $20-million loan with the Asian Development Bank (ADB) for funding energy savings projects of small-scale companies in Southeast Asian countries.
Eric Graef, regional director of Cofely, told reporters in the sidelines of ADB Workshop on Energy Efficiency Services for buildings that besides the ongoing $2-million Waterfront Hotel project in Cebu and the $1-million for Waterfront Manila Pavillion Hotel and Casino, they are eyeing various buildings, infrastructure and developers in the country to finance the energy efficiency initiatives.
“We are looking at other possible projects with property developers like Ayala, SM, Filinvest, some factories, semiconductors industry, as well as groups like San Miguel Group and large panels of potential users of energy efficiency and savings financing,” Graef said.
Graef explained that the two Waterfront energy efficiency projects was initially funded by Cofely, but is now being funded by the $20-million loan from ADB, as well as their future projects to date.
On Tuesday, Cofely signed the multicurrency nine-year loan with the ADB, amounting to $20 million (P860 million) to fund energy savings initiatives for the buildings not only in the Philippines, but also in Association of Southeast Asian Nations (Asean).
Besides the five to eight projects per year, Graef said that they will support energy efficiency efforts of the buildings, industries and governments in the country and would continue to do so for “long term” period.
“We would like to do it in a long time, for long term. We hope we will still be there for 20 years looking for energy savings project,” said the Cofely regional director for the Pacific.
Underspending Manila-based lender ADB, on the other hand, said that there is an “underspending” and large potential in the energy efficiency, which require a total of $11 billion of investment to be able to solve energy efficiency concerns of businesses throughout Asean.
“[Cofely] borrowed directly to us, a total of $20 million in various currencies depending on which country the project is concerned—Philippine peso, Thai baht, Malaysian ringgit among others,” ADB Senior Investment Specialist Daniel Wiedmer said in an ambush interview.
Wiedmer also said that Cofely would make the multi-currency loan available to small-scale buildings, facilities and companies in the region as these small-scale businesses are not able to afford direct loans to ADB when it comes to energy savings and efficiency as they only do “big-scale” loans minimum of $20 million.
The development bank said in their statement that the $20-million loan and investment by Cofely can save an about 150,000 megawatt hours of energy, 90,000 carbon emissions, and yield average net savings of $10 million by 2019. source
FIRST Gen Corp. of the Lopez Group of Companies on Tuesday said it raised an additional $50 million from a dollar-bond issuance.
“Further to our earlier disclosure on the reopening of US dollar bond issue, please be informed that the company has issued an additional $50 million at an issue price of 100.125. The additional notes were issued under the terms and conditions of First Gen’s outstanding $250 million, 6.5 percent senior unsecured fixed-rate notes due October 2023,” the company said in a disclosure to the stock exchange.
The company has successfully raised $250 million from the issuance of 10-year bonds. Proceeds of the fund-raising exercise will be used to partly finance the construction of the company’s San Gabriel natural gas-power project in Batangas.
First Gen President Francis Giles Puno said the company will need an estimated $1.25 billion more to finish the construction of the power facility.
He said total capital expenditure for the first two phases of the project is “about $650 million.” Of this amount, the company has already raised $250 million.
“We will borrow probably an additional $250 million and then the $100 million will be internally generated. Hopefully we can also get that completed,” he said.
The San Gabriel project will be built in three phases. The first phase, referred to as the San Gabriel Avion project, will have 100 megawatts (MW) of power capacity. Completion is set for the last quarter of 2014.
The second phase involves the construction of one 400-MW unit that will be completed by March 2016. First Gen said it needs to work on its financing plan if it wants to meet its 2016 target.
“Total [capacity] will be about 500 MW. The first $250 million will be earmarked for the construction of Avion, which is 100 MW. For the 400 MW, we expect to raise more borrowings, depending on where we buy the equipment. We can tap what we call export-credit agencies. There is available export-credit financing when you order these equipment,” Puno explained.
The power-generation arm of the Lopez Group is considering all possible fund-raising options to finance the project, including export-credit financing which, Puno said, has a longer maturity date. “Our $250-million bond has a 10-year maturity date, while for export-credit financing it might take 12 years,” added the First Gen official.
The third phase of the San Gabriel project is composed of two 400-MW units and a liquefied natural gas receiving and regasification facility that can be completed by 2018.
“That’s probably another $900 million. Hopefully, we will be able to generate revenues from the 500 MW. Once it starts to generate revenue then we can reinvest in the 900 MW,” the official said. source
By Ben Serrano(The Philippine Star) | Updated October 29, 2013 - 12:00am
BUTUAN CITY , Philippines – A judge has ordered the Agusan del Norte Electric Cooperative, Inc. (ANECO), the only power supplier in Agusan del Norte and Butuan City, to stop collecting taxes from its consumers.
Citing a tax exemption certificate from the Bureau of Internal Revenue (BIR), Judge Francisco Maclang issued a 20-day temporary restraining order (TRO) against the ANECO.
The TRO, dated Oct. 24, stemmed from a class suit filed by eight consumers against the ANECO and its officers, headed by general manager Horacio Santos.
Maclang set the hearing on Nov. 12 for the preliminary injunction, which would determine whether the TRO would be lifted or not.
The eight complainants were city councilor Sergio Pascual, Romeo Catalan, Maryknoll Abejay, Gregorio Dizon, Antonio Mordeno Jr., Mariano Montilla, Clementine Cordova, and Hermenia Sanico.
Maclang said the BIR issued the certificate of tax exemption to ANECO after the power firm was converted into a cooperative in November 2011 by the Cooperative Development Authority.
The certificate exempted the power firm from paying value added, income, percentage and excise taxes.
The BIR spared the consumers from paying system loss taxes, VAT revenues on distribution supply, metering, and lifeline subsidy.
The certificate is valid for five years from date of issuance.
However, the complainants alleged the ANECO continued to collect taxes from them.
ANECO spokesperson Danny dela Serna on Friday told journalists that they would question the TRO. source
A. “New Localized Hydroelectric Plants in Mindanao
The IPPs argued that the Hydroelectric power is unreliable and not enough. The answer is not really.
"For the long-term power supply, the provincial and municipal governments should submit applications to the DOE for the development of hydropower plants, both large and small, in their respective territories that have been determined to be the least-cost hydropower plants in those areas.
Such hydropower plants will include the Tagoloan 2 (68 MW) in Bukidnon, the Uguiaban hydro plant (175 MW) on the Cagayan River, the Agus 3 (225 MW) in Lanao del Norte, Mainit hydro (25 MW) in Agusan Norte, Maganoy No. 5 hydro (300 MW) on the Agusan River, the Tandik and other small hydro plants (total of 15 MW) in the Compostela Valley, and the Dapitan small hydro plants (total of 10 MW) in Zamboanga Norte. There are many other economically viable small hydropower plants all over Mindanao.
It should be the LGUs that will apply for and own the hydropower plants (to be constructed in partnership with the private sector) to keep down the rates of generation from the plants (because of the lower IRR required by LGU’s compared with the private sector).
With the LGU’s applying for development of hydro plants, the permitting process should take a shorter time for approval compared to applications by the private sector, say one year vs. three or more years. It will take longer, though, to arrange for ODA or other soft loans to finance the projects."
B. SOLAR ENERGY can be viable. Construct Solar PV Plants throughout Mindanao
"Electric cooperatives and LGU’s should petition the ERC for approval of higher feed-in tariff for solar PV of around 16 pesos per kWh (which was determined by NREB to be viable during the FIT hearings last year), and upon approval construct 100 MW or more of solar PV plants throughout Mindanao.
The proposal of the DOE to deploy modular gen-sets will be used to justify the higher FIT for solar PV. The diesel gen-sets will cost 18 pesos per kWh, and have rate impact of four pesos per kWh, while the solar PV will cost 16 pesos/kWh, and have rate impact of less than five centavos per kWh (because of the operation of the FIT mechanism).
The AMRECO, Mindanao LGU’s, Chambers of Commerce, and Mindanao NGO’s could initiate the petitions."
C. MASSIVE REHABILITATION OF OUR WATERSHEDS (Our permanent recommendation)
Cagayan de Oro and the rest of the country is losing its forests which hold the water to keep hydro electric power generation. If we do so, we will not only provide us with a cheaper cost of power generation and supply but also reduce the incidence of floods and disasters. Moreover, the soil will also increase its water absorption capacity and fertility to restore our ailing sustainable food production capacity and housing supply needs which has brought millions of people to the congested cities for the dismal conditions in the countryside.
Nixon A. Baban, (chairman of Bangon Kagay-an) studying another Writ of Kalikasan
Cagayan de Oro & Misamis Oriental share the same airshed that is now part of our study for another Writ of Kalikasan case. Yes, absolutely right, we have to grow. So, to grow, there more reasons not to build the coal plant here again. We have played host to one (STEAG), don't you think that is enough? Agus Hydropower Plant in Pulangi used to provide 50 percent of the Mindanao's power supply, its breakdown caused the power shortages. Despite that Cagayan de Oro and Misamis Oriental have been spared. IT IS NOT CDO or MIS. OR. THAT NEEDS ADDITIONAL ENERGY SOURCE. The better option is to make Agus Hydropower Plant 100 percent functional where it can provide 982 Megawatts twice the capacity of these coal plants. Rehabilitating it will extend its life for another 30 years. This is common sense, but some business interests find this unprofitable. And please do not debate to us about the health issues. The burden of proof lies on those who claim that COAL ENERGY does not cause harm to our health. We thousands of link and studies to show its ill-effects. Why do you suppose China, the US or Germany has banned this? Cagayan de Oro & Misamis Oriental share the same AIRSHED, that is now part of our study for another Writ of Kalikasan case. source
ARE the coal plants or even the diesel plants the cheaper, healthy and sustainable options? Not really on both the short term and the long term if we listen to the experts.
Engr. Dave Tauli, former senior vice-president of Cagayan de Oro Electric Power and Light Company (Cepalco) who designed Cepalco’s solar plant in Indahag, in a statement addressed to stakeholders via email furnished to me some time ago by Mike Baños, urged the stakeholders to ask the government to rehabilitate the nationally operated hydro based power plants and to use diesel powered generators in the interim.
On a long term, there is a viable proposal to tap solar energy and for local government units (LGUs) to develop sustainable and clean hydroelectric plants in identified areas in Mindanao to cover for the shortfall, in cooperation with the private sector to generate cheaper sources of electricity.
Former Congressman Teddy Casiño called the past brownouts a blackmail to cause panic among the users to make us believe that only the privately owned and profit hungry Independent Power Producers (IPPs) can provide us with cheap power. Now, the Department of Energy and the government refused to rehabilitate our watersheds and develop cheap hydroelectric sources of sustainable electric supply and energy in favor of expensive, environmentally destructive and cancer causing toxic coal power plants.
Here are some of the proposed solutions:
Short Term Solutions:
A. “We need to use government Diesel Power Plants”
“1.Petition the government for the NPC-Mindanao to operate the Iligan diesel power plants under the same terms and conditions that they did during the 2009blackouts
2. Petition the government for the PSALM to transfer to Mindanao the three 32-MWpower barges in Iloilo, to be operated by NPC-Mindanao to supply power to Mindanao consumers.
The foregoing will enable the NPC – Mindanao and PSALM to supply the present shortfall in their contracts with their customers in Mindanao, which shortfall is due to the lack of power from their hydropower plants. The rates for the supply from these emergency sources of power should be the same rates NPC-PSALM is now charging, but the Mindanao consumers could pay full-cost recovery rates, which should be around nine pesos per kWh or less."
B. “Carry Out the Baloi Flood Control Projects”
"The government to carry out immediately the Balo-i plains flood control project to allow increase in the capacity of upstream Agus plants of up to 100 MW, within one year or so from start of construction."
May I add that there was also a shortfall of water for the hydropower plants during the dry season but that can be addressed by a massive rehabilitation of our watersheds. Cost analysis can arrive at a conclusion that investing on these programs will not only solve the power crisis but also improve flood control and the water absorption capacity and fertility of the soil for food production. source