Ceneco to get diesel power starting January 2015

By Danny B. Dangcalan
Monday, August 25, 2014

THE Central Negros Electric Cooperative (Ceneco) will source 18.9 megawatts (MW) of diesel power from Energreen Power Development and Management Inc., under its project company Central Negros Power Reliability Inc. (Cenpri), for 15 years beginning January next year to augment its power deficit especially during peak hours.

The initial supply will start this December, Ceneco general manager Sulpicio Lagarde Jr. said in a forum over the weekend.

Under the contract, Cenpri shall provide Ceneco with 10 to 12 hours of power per day during peak hours, and 24 hours of power for about 90 days during the maintenance downtimes of Ceneco’s major power suppliers or grid interruptions.

Evergreen corporate communications officer Manny Canto said the deal is for a “peak and reserve” power supply for 15 years starting from commercial operation, or from January 2015 to 2029.

Cenpri shall start the commissioning schedule on December 26, 2014 with 9 MW; on January 26, 2015 with 13.5 MW; on February 26, 2015 with 19.5 MW; and on March 26, 2015 with 26 MW.

Cenpri shall charge Ceneco between P12.44 to P12.50 per kilowatt hour.

Energreen Regulatory Compliance officer Rizalyn Tejada said the contract has been signed in December 2010 yet, but it was only in August 2013 that the amended memorandum of agreement (MOA) was signed.

The supplemental agreement was then signed in July 2014, while the application for approval of the amended MOA with prayer for provisional authority is still pending before the Energy Regulatory Commission, Tejada said.

Lagarde said that at the time of signing in 2010, Ceneco was still negotiating with Psalm (Power Sector Asset and Liabilities Management) for a lower rate.

But with the eventual exit of Psalm on December 25, 2014, Lagarde said they realized that there may be a vacuum of peaking power contract in the Visayas, thus Ceneco has to secure its own peaking power supplier—one that is in the Negros Island to make it reliable.

Lagarde said that at present, the required power consumption of Ceneco is at 120 MW on peak hours.

This is supplied by 64 MW from Kepco, 20 MW from Palinpinon, and 21 MW from Psalm. These three power generators have a combined capacity of only 105 MW or a deficit of about 15 MW.

Before the contract with Cenpri, Ceneco gets augmentation power from WESM (Wholesale Electricity Spot Market) at the rate of P3.80 (during off-peak hours or from 12 midnight to 5 a.m.) to P32 per KwH (during peak hours or from 7 a.m. to 11 p.m.), Lagarde said.

Under the contract with Cenpri, the company will augment the power deficit during peak hours. However, at times when WESM has a lower rate than Evergreen, Ceneco may opt to purchase power from WESM.

With the volatility of WESM price especially during times of power shortages and generation outages, Energreen assured Ceneco that the cost and line rental of peaking power does not go up over its ceiling price of P12.50 per KwH, Lagarde added.

This contract with Cenpri is advantageous to Ceneco because it provides us a leverage against the volatile WESM rates, Lagarde stressed.

Pasig-based Energreen is about to complete its two-hectare diesel-fired Cenpri power plant located in Barangay Calumangan in Bago City, Canto said.

Its location is ideal to Ceneco since it will bypass the Visayas Transmission Grid and will connect directly to Ceneco’s priority feeder in Reclamation Area, the second largest load in central Negros, he added.

Energreen specializes in HFO medium diesel plants for island grids, and is a niche player in serving the power needs of electric cooperatives, with successful projects in Palawan (17.2 MW), Mindoro (15 MW), and Catanduanes (3.6 MW), he said. source

Published in the Sun.Star Bacolod newspaper on August 25, 2014.