Six firms eye PNOC plant

At least six foreign and local groups have expressed a keen interest in bidding for the Philippine National Oil Co.-Energy Development Corp. (PNOC-EDC)’s 40-megawatt geothermal plant project in Negros Occidental.

PNOC-EDC chairman and chief executive officer Sergio Apostol said the six Kanematsu Corp.; Mitsubishi Corp; Alstom Philippines and the joint venture of P. Kiewit Sons Inc. Bibb & Associates and Northeast China International Electric Power Corp.

Apostol said the groups submitted Tuesday their pre-qualification requirements to participate in the bidding for the Northern Negros geothermal power project (NNGP).

The PNOC-EDC official said the bidding will take place within this quarter. It will be for a full turnkey project to include engineering design, supply, deliver, installation, testing and commissioning of the power facility.

The state-owned energy firm, he said, is optimistic that it could start the construction of the $40-million power plant project by the second half of 2002.

He said the NNGP, scheduled for commissioning in 2004, will not only be the company’s first fully-owned power plant. It will also be the country’s first power project to operate as a merchant plant under the new electricity environment. "When the project was in its planning stage, we were already studying the merchant option for the NNGP since we knew the power industry would eventually be restructured," he said.

The company has said it plans to operate the NNGP as a merchant plant and sell power directly to consumers to meet the demands of the new electricity environment.

Prior to the passage of Republic Act 9136 or the Electric Power Industry Reform Act (EIRA), all independent power producers such as EDC are required to sell the power that they generate to the state-owned power generation firm, the National Power Corp. (Napocor) under a power purchase agreement or (PPA).

Based on the merchant plant option, PNOC-EDC will only have to pay the wheeling charges for the use of Napocor’s transmission lines and electric cooperatives’ distribution lines to deliver the power to its clients.

The company is now awaiting the EIRA’s implementing rules and regulations and the Energy Regulatory Commission’s guidelines for open access for the wire business.

"While we still have to determine the results of the bidding, I am confident that we will be able to offer competitive rates because our fuel (steam) cost is almost flat and peso-denominated, plus we anticipate power demand in the area to increase," he said.