BAGUIO CITY – Close to 850,000 residential and commercial consumers of eight rural electric cooperatives in Region I and the Cordillera will be enjoying more or less P1 cut in their monthly power bills if the provisions of the Joint Competitive Power Supply Procurement (JCPSP) for the aggregated load requirements of the cooperatives will be applied in the current prevailing situation.
The eight electric cooperatives that agreed to undertake the JCPSP for their aggregate base load of 103 megawatts are the Region I-based Ilocos Norte Electric Cooperative (INEC), Ilocos Sur Electric Cooperative (ISECO), La Union Electric Cooperative (LUELCO) and the Pangasinan Electric Cooperative (PANELCO) III and the Cordillera-based Abra Electric Cooperative (ABRECO), Benguet Electric Cooperative (BENECO), Kalinga-Apayao Electric Cooperative (KAELCO) and the Mountain Province Eletric Cooperative (MOPRECO).
Engr. Melchor Licoben, BENECO network services department manager and chairman of the Joint Bids and Wards Committee (JBAC) of the Region I and CAR electric cooperatives, said the winning bidder of the JCPSP was the United States-based AES Philippines, operator of the Masinloc-based 600-megawatt coal-fired power plant, with a minimum bid price of P3.7495 per kilowatthour generation cost and a long-term levelized price of P5.4967 per kilowatthour, edging out the Bataan-based GN Power Ltd. Co. which submitted a bid of P3.7626 per kilowatthour and long-term levelized price of P5.6715 per kilowatthour generation cost.
“The aggregation of electric cooperatives would actually help the government solve emerging power supply shortages because it is able to guarantee long-term stable power supply at even much lower cost,” Licoben stressed.
At present, BENECO buys its power from the Sual-based TEAM Energy Philippines between P4.50 to P4.80 per kilowatthour compared to the offer of the winning bidder.
Licoben disclosed the JBAC already issued the notice to award to AES Philippines last Monday and negotiations between the Joint Board of Region I and Cordillera ECs will follow in order to arrange for additional benefits that could be given to the consumers that will be contained in the contract to be signed before the end of June.
He added the contract to be signed will be subsequently submitted to the Energy Regulatory Commission (ERC) for approval so that the power generator can proceed to put up the additional 300-megawatt coal-fired power plant in addition to its existing power plant in Maisnloc, Zambales that will be completed by December of 2018.
“The reduction in power rates to be effected to the consumers by the time the contract will be full force in effect in December 2018 will still be dependent on the prevailing market forces that time although much lower power rates will be guaranteed,” Licoben added.
According to Licoben, the primary objectives of the JCPSP are to secure the supply of electricity for the captive customers of the electric cooperatives for a 20-year period; to achieve least cost supply of power through joint power supply planning and competitive procurement process that can be justly and reasonably passed-on to the member-consumers of the cooperatives; to mitigate the risks of electric cooperatives in the electricity market through bilateral power supply contracts; to achieve a uniform generation price for the electricity consumers in Region I and CAR and to contribute to the security of Luzon grid by adding new capacity as a result of the long-term power supply agreements of the electric cooperatives.
The aggregation of electric cooperatives is being pursued in accordance to Section 23 of Republic Act (RA) 9136 or the Electric Power Industry Reform Act (EPIRA) which provides that “to achieve economies of scale in utility operations, distribution utilities may, after due notice and public hearing, pursue structural and operational reforms such as but not limited to, joint actions between or among the distribution utilities, subject to the guidelines issued by the ERC. Such joint actions shall resulted in improved efficiency, reliability of service, reduction of cost and compliance to the performance standards prescribed in the IRR of this Act.”
INEC committed the biggest monthly power demand to be sourced from the new supplier with 51 megawatts followed by BENECO with 14 megawatts, PANELCO III – 10 megawatts, LUELCO – 8 megawatts, ABRECO and ISECO with 7 megawatts each, KAELCO – 5 megawatts and MOPRECO with 1 megawatt.
Licoben explained BENECO was only able to commit 14 megawatts to the aggregation because its over 55 megawatts monthly power requirement is still under a 20-year power supply contract with TEAM Energy which will expire on 2023 but the same can still be subjected to the famous Swiss challenge once their new power generator will be able to start operating its power plants.
AES Philippines plans to build two 300-megawatt power plants to add up to its existing 600-megawatt coal-fired power plant in Masinloc, Zambales but it is currently looking for buyers to guarantee the procurement of the power that it will be able to produce.
By Dexter A. See