EDC geothermal projects granted BOI incentives

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THURSDAY, 18 AUGUST 2011 19:27 MAX V. DE LEON / REPORTER

ENERGY Development Corp. (EDC), an affiliate of the Lopez-owned First Philippine Holdings Corp. (FPHC), has earned the nod of the Board of Investments (BOI) for the grant of incentives to its two geothermal projects.

EDC’s geothermal plants, situated in Negros Oriental and in the Albay-Sorsogon area, qualified for perks under Republic Act (RA) 9513, or the Renewable Energy Act of 2008, even if they have been in operation for several years already.

EDC’s plant in Negros Oriental, known as the Southern Negros Geothermal Production Field (SNGPF), produces geothermal steam that powers the 192.5-megawatt (MW) Palinpinon power plants owned and operated by Green Core Geothermal Inc., a subsidiary of EDC. Its geothermal system lies in the northern flanks of the inactive Cuernos de Negros volcano. SNGPF consists of two steamfield projects—Palinpinon 1 and 2.

Palinpinon 1 comprises 25 production wells, 11 injection wells and a 14-kilometer pipe network. Palinpinon 2, on the other hand, consists of 16 production wells, six injection wells and a 7-kilometer pipe network. SNGPF’s book value is P1.39 billion as of 2010 employing 288 personnel.

EDC’s project in both Albay and Sorsogon, more popularly known as the Bacon-Manito geothermal production field (BacMan), comprises two steamfield projects—BacMan 1 and 2.

Bacman 1 supplies steam to a nearby 110-MW power plant of the National Power Corp. (Napocor). Bacman 2 supplies steam to a nearby 40 MW power plant of Napocor. Total net book value of BacMan as of December 2010 is P2.52 billion with a manpower requirement of 261 people.

Under the RA 9513, all renewable energy (RE) developers that acquire operate and/or administer existing RE facilities that were or have been in commercial operation for more than seven years upon the effectivity of the sct on February 11, 2009, is not entitled to income tax holiday (ITH). 

“SNGPF was commissioned in 1983 while BacMan I started operating in 1993 and BacMan II in 1994. Hence, these projects are therefore not entitled to ITH incentive,” the BOI noted.

“Instead, they are entitled to a corporate tax rate of 10 percent on their taxable income upon registration with the Department of Energy (DOE). SNGPF and BacMan have been registered with DOE since October 23, 2009 as RE developers of geothermal resources.”