To facilitate the construction of its 200-megawatt coal-fired facility in Cebu, Kepco Philippines Corp. and Salcon Power Corp. have sought the Energy Regulatory’s go-signal for them to enter into a sales agreement with Cebu Electric Cooperative Inc. I and II.
In their application, Kephilco and Salcon said the agreement would result to a rate of P4.8160 per kilowatthour (kwh) in the franchise areas of the ECs starting 2010.
Based on the power sales agreement (PSA), Kephilco-Salcon and Cebeco I will source 119,385 million kwh annually from the new Naga coal plant in Cebu. Cebeco II will source a separate 166.022 million kwh per year.
Under their application, Kephilco-Salcon said they would implement a base rate of P4.30 per kwh subject to foreign exchange rates, fuel prices and international price indices as against the current rate of the National Power Corp. (Napocor) of P3.193 per kwh.
“The Napocor generation rate is the current 2007 rate. On the other hand, the proposed Kephilco-Salcon price will apply beginning 2010. The expected increase in the cost of generation from 2007 to 2010 must be considered,” the proponents of the power facility said.
In November 2006, Kephilco-Salcon and Napocor entered into a joint sales agreement whereas Napocor will market the electricity to be generated from the Naga facility and secure commitments from the distribution utilities for the supply of such electricity.
Under the deal, the consortium will build the coal facility which will utilize circulating fluidized bed combustor boiler, a clean coal form of technology. The coal plant will serve the power requirements in the Visayas area.
“Most of Napocor plants providing the present supply are already beyond their useful life of 25 years and are deteriorating. Power supply conditions in the Visayas area will reach a critical level as early as 2008. The new Naga coal power plant will greatly alleviate a supply shortage by providing much needed stable and adequate supply of electricity,” the group said.