The bid of Delta P for an additional
26.6 megawatt power supply project successfully passed the Competitive
Selection Process through a Swiss Challenge by the Bids and Awards Committee of
the Palawan Electric Cooperative, Friday.
BAC Chairman Nap Cortes announced
prior to the selection process that there were two companies that manifested
their interest during the pre-bid conference held September 19 but did not
appear during the formal opening and evaluation of comparative proposals thus
the BAC will award the project to Delta P, the original proponent of the
proposed project.
The 26.6 megawatt power supply
project is expected to be completed in the third quarter of 2016 at a total
budget cost of P1.6 billion.
Gigawatt Power Inc. Senior Vice
President Tito Villareal said that they will be using brand new bunker fueled
engines which are now in Bauang, La Union and ready for shipment to Palawan.
GPI is one of the holding companies
of Delta P. DPI is one of three independent power producers in Palawan operating
a 16-MW bunker-fired power plant comprising four (4) units of 4-MW generator
sets.
Villareal stressed that they went
ahead of the project approval recognizing the need to address the pressing
problem of a lack of a reliable, low-cost power supply on Palawan, especially
during summer season.
“Without even being definitely sure
of the agreement, and because we see the need, we already started clearing the
land and started the foundation. Our timetable states that if everything goes
on schedule, before the end of next year these engines will be supplying
energy,” Villareal said.
“We will strive to give our best
service to PALECO and its consumers. The consumers have suffered from
continuing brownouts and blackouts and we will do our best to solve this
problem,” Villareal added.
The current power supply agreement
of Delta P with Paleco will expire in March 2019 and the project is in
preparation for the end of the first contract with a two-year overlapped
period.
Contrary to the concern that PALECO
might “over contract” the power supply by giving this project to Delta P (which
was the subject of a Temporary Restraining Order filed by DMCI Power
Corporation with the Energy Regulatory Commission, but later dismissed), Paleco
General Manager Ric Zambales assured that with the new Delta P project, Palawan
will have enough generating capacity to meet increased demand in the next five
years. The Delta P plant will all add stability, reliability and flexibility to
the grid and complement the other independent power producers.
“We have sufficient supply of power
for the next five years with the addition of 26.6 megawatt which will be
operational by the third quarter of 2016,” Zambales said.
Of particular concern to the
business community is the impact of the new power plant on power rates.
Currently, the True Cost Generation Rate (TCGR) for the Palawan grid is about
P12 per kilowatt hour. However, consumers pay only P6.58/kwh. The
difference of P5.4/kwh is made up by the Universal Charge for Missionary
Electrification – a subsidy of about P5.4/kwh or over a billion pesos per year
for Palawan.
There is growing concern that the
UCME subsidy will be removed in the future, forcing consumers to pay the true
cost of generating electricity. The winning rate submitted by Delta P was
P8.22/kwh which will substantially reduce the “blended” generation rate on the
Palawan grid. With the addition of three small hydro plants with a
combined capacity of 18Megawatts on the Langogan, Batang Batang and Kalikiagan
Rivers over the next 3 years at a rate of P6.58/kwh, the blended rate will be
further reduced and help buffer the impact of reducing the UCME subsidy.
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