Aboitiz gets buyer for Mindanao power output

Manila Times.net
Aboitiz Power Corp. (AP), through its wholly owned subsidiary Therma Marine Inc. (TMI), has finally found a buyer for its uncontracted capacity     in Mindanao.
In a statement, AP said that TMI has signed a power supply agreement with Davao del Norte Electric Cooperative (Daneco), which distributes electricity to the provinces of Davao del Norte and Compostela Valley.

“Our supply of power to Daneco, our host community for the Mobile 1 power barge, will serve as a form of insurance to meet the needs of the rapid growth of the Tagum area,” Luis Miguel Aboitiz, AP sales, trade and marketing senior vice president, said.

Mobile 1 is one of the two power barges in Mindanao acquired by AP from the government auction block.

Despite a power supply deficiency in the region in the past months, the power firm was unable to find a buyer for the facilities output because of their high prices compared with subsidized rates prior to their sale; and the relatively lower rates offered by the region’s hydroelectric plants.

To help improve Mindanao’s power situation, the Department of Energy earlier called on its allied agencies and state-administered electric cooperatives to help secure a supply agreement for the barges’ output.

National Grid Corporation of the Philippines (NGCP), the private company running the country’s transmission lines, also agreed to allow AP to prioritize the plants’ output for power generation should the latter be able to sign a bilateral contract with utilities.

AP’s power barges, which have a combined capacity of 200 megawatts, are currently under contract with NGCP for half of their capacity for ancillary services or for back up purposes, which means that they cannot be totally used for baseload or day-to-day power supply.

AP, on the other hand, structured its power rates to have a fixed and variable portion to allow its diesel-fed barges to compete with the rates of Mindanao’s hydro plants.

“This way, the more expensive energy is only drawn as it is needed, thereby minimizing the impact to Daneco’s consumers,” Aboitiz said.
Under their agreement, AP committed to provide Daneco up to 10 megawatts of power anytime that it requires supply. The deal will be effective for a year, starting on the date when the Energy Regulatory Commission approves the proposed rate.

“Daneco, through the initiative of its management and board of directors, is making this bold move to be the first cooperative in Mindanao to sign with TMI and work towards finding a solution to our power supply problems,” Dean Briz, Daneco board president, said.

Euan Paulo C. Añonuevo