Ormeco, EPI forge tie-up

Business Mirror

03 Feb 2014 

 

Written by Lenie Lectura

THE Oriental Mindoro Electric Cooperative (Ormeco) and Emerging Power Inc. (EPI) on Monday inked a power- supply agreement (PSA).

Under the PSA, Ormeco will source power from the 40-megawatt (MW) Montelago Geothermal Power Plant that will be put up by EPI at a cost of $180 million.

Present during the signing of the PSA held in Calapan City, Oriental Mindoro,was  Energy Secretary Carlos Jericho L. Petilla, who lauded the project, saying this will help make blackout-plagued Mindoro an independent and self-sufficient producer of stable and affordable electricity.

This, in turn, will ensure an affordably priced and stable supply of electricity not only on the island but also in the entire Philippine archipelago.

“I want Mindoro to be set as an example for the entire nation,” Petilla said. “There are so many problems in the Philippines regarding electric cooperatives. In comparison, Ormeco is well-managed, with solid financials and no problems.”

Mindoro is reliant on power from the main Philippine power transmission grid through the National Power Corp.-Small Power Utilities Group which is mandated by law to subsidize electricity to Mindoro and other areas not connected to the main transmission grid, also referred to as missionary areas.

“When business in Mindoro grows, Metro Manila consumers have to pay for the increase in its electricity consumption through a subsidy,” Petilla said. “Investors then doubt the stability of electric supply in Mindoro because without this subsidy, there will be no electricity there. But through this agreement, through this project, there will no longer be any need for a subsidy.”

“Not all areas of the Philippines have the resources and potential for geothermal energy, which is stronger than other renewable-energy sources like wind and solar,” the energy secretary added. “Wind and solar cannot match the 40 MW that the Montelago Geothermal Power Plant can produce.”

Rep. Reynaldo Umali of the Second District of Oriental Mindoro said power consumers in Oriental Mindoro pay P11 per kilowatt-hour (kWh). With the Montelago Geothermal Power Plant, residents will pay only P6.59 per kWh.

“What’s more, we will no longer need subsidy from the main grid. This means consumers from other parts of the country do not need to pay for that subsidy. This will also reduce their electric bill,” Umali added.

The project is also being eyed as an additional power source for the Occidental Mindoro Electric Cooperative.

Oriental Mindoro experiences up to four hours of blackouts daily, while Occidental Mindoro suffers from even longer power interruptions.

Earlier, EPI Spokesman Gani Capaning said the 40-percent power-cost reduction would result in up to P2.1 billion in electricity bill savings for the people of Mindoro in four years’ time.

“If we keep investing in coal and oil, consumers will be paying P40 per kilowatt-hour by year 2030, based on estimates of the International Energy Agency and The Economist. In contrast, the Montelago Geothermal Power Plant will stabilize the price over the next 20 years and consumers will only pay a maximum of P7.50 by 2030,” Capaning said.

EPI expects to drill by the third quarter of this year and will start providing electricity by mid-2015.   source