7 power supply deals get ERC go-ahead

Posted on October 11, 2016
http://www.bworldonline.com/content.php?section=Corporate&title=7-power-supply-deals-get-erc-go-ahead&id=134664

THE Energy Regulatory Commission (ERC) has given provisional approval to power supply deals forged by GNPower Dinginin Ltd. Co. with seven electric cooperatives in the Visayas, bolstering the future commercial viability of the company.

GNPower Dinginin signed the power purchase and sale agreements (PPSA) with Don Orestes Romualdez Electric Cooperative, Inc.; Southern Leyte Electric Cooperative, Inc.; Leyte II Electric Cooperative, Inc.; Leyte III Electric Cooperative, Inc.; Leyte IV Electric Cooperative, Inc.; Leyte V Electric Cooperative, Inc.; and Samar I Electric Cooperative, Inc.

GNPower Dinginin plans to build, own and operate two identical units of 660 megawatt (MW) coal-fired power plants and associated facilities in within a 61-hectare industrial property near its two-unit 300-MW GNPower Mariveles Ltd. Co. coal power plant in Barangay Alasasin, Sitio Dinginin in Mariveles, Bataan.

In granting provisional approval, the ERC said the final generation cost that could be recovered by the company would be determined in its decision.

“In the event that the final rate is higher than that provisionally granted, the resulting additional charges shall be collected by [GNPower Dinginin] from [the electric cooperative]. On the other hand, if the final rate is lower than that provisionally granted, the amount corresponding to the reduction shall be refunded by [GNPower Dinginin] to [the electric cooperative],” the ERC said.

Based on the terms and conditions of the PPSA, the parties plan to start delivery of power on Dec. 26, 2018. Part of the funds needed to build GNPower Dinginin’s facility will be sourced from bank loans. The provisional approval of the PPSA is a vital requirement for the release of the loan proceeds.

The provisional approval comes after the ERC dismissed the PPSAs applied for by GNPower Dinginin with Biliran Electric Cooperative, Inc. and La Union Electric Cooperative, Inc.

On Oct. 5, Aboitiz Power Corp. announced its subsidiary Therma Power, Inc. signed a deal to acquire the stakes held by Blackstone Group-backed investment funds in GNPower Dinginin and GNPower Mariveles for $1.2 billion.

Once the deal is completed, Therma Power will have a 40% beneficial ownership interest in GNPower Dinginin and a 66.10% beneficial ownership interest in GNPower Mariveles. -- Victor V. Saulon