EDC sign 7 new supply deals with coops

Manila Bulletin

By MYRNA M. VELASCO

January 12, 2011, 1:38am

MANILA, Philippines – Lopez-owned subsidiary Green Core Geothermal Inc. (GCGI) has cornered seven new power supply contracts that shored up capacity sales from its Leyte geothermal plants by 58 megawatts.

The biggest of the off-take agreement it sealed has been with Negros Oriental II Electric Cooperative Inc. (NORECO) for 25 megawatts.

The other electric cooperatives it signed up with are those in Leyte and Negros islands, namely: Negros Oriental I Electric Cooperative Inc.; Negros Occidental Electric Cooperative (NOCECO); VMC Rural Electric Service Cooperative Inc. (VRESCO); Don Orestes Romualdez Electric Cooperative Inc. (DORELCO); Leyte II Electric Cooperative Inc. (LEYECO II); and Leyte V Electric Cooperative Inc. (LEYECO).

For the remaining six electric cooperatives, GCGI noted that the allocation has been for aggregate 33 megawatts.

EDC president and chief operating officer Richard B. Tantoco noted that the value proposition they have set on the table with electric cooperatives hinged on the fact that “we offer the most competitive price in the market and we’re investing heavily to improve the reliability of our plants so that power interruptions will be significantly reduced and eventually eliminated.”

He added that as far as capacity sales are concerned, “we have always prioritized the electric cooperatives in our host areas as we want them to be the first to enjoy the benefits of having clean, reliable and affordable power.”

In the restructured electric power industry, the process of selling capacity to off-takers (buyers) has already shifted to the power generators in a merchant market, which mainly characterized by having many buyers in contrast to the single-buyer model that the industry has gotten used to in the 1990s.

GCGI explained that the capacity it offered to the electric cooperatives were previously being wheeled to the National Power Corporation – from the period prior to the privatization of the Tongonan I and Palinpinon geothermal plants. Said contracts though already expired in December last year.

As the Lopez firm acquired the plants in 2009, it divulged that negotiations with prospective off-takers actually began as early as January 2010, as it already anticipated the lapse of the residual contract with the state-run power firm.