ERC okays 3-year power supply deal between APRI, FBPC

MANILA, Philippines - The Energy Regulatory Commission (ERC) has approved the three-year power supply contract of AP Renewables Inc. (APRI) and First Bay Power Corp. (FBPC).

APRI, a unit of Aboitiz Power Corp. (APC), will source the electricity to be supplied to FBPC from the 747.53-megawatt (MW) Tiwi geothermal power plant (TGPP) and Makban geothermal power plant (MGPP) located in Albay and Laguna/Batangas, respectively.

APRI, after acquiring these power plants, became the assignee of the National Power Corp. (Napocor) contracts which include, among others, the contract with FBPC.

On Oct. 22, 2009, FBPC requested the ERC for the extension of the transition supply contract (TSC) from Oct. 25, 2009 to Jan. 25, 2010.

In view of the expiration of the TSC, FBPC entered into negotiations with APRI for a bilateral power supply contract. APRI was considered as the new supplier as its rates are lower than the Napocor rates under the existing TSC.

The Aboitiz unit also gets its supply from renewable energy which will be subject to a zero value-added tax.

FBPC said the line rental costs will also be lower because of the proximity of APRI’s power plants to the franchise area.

The Batangas-based electric coop said the reliability of the transmission grid going to FBPC is increased because APRI’s power plant is in close proximity to FBPC’s franchise area.

FBPC is a private distribution company operating in Poblacion, Batangas. It took over the operation of Bauan Electric Light System (BELS), which has been granted a franchise by the National Electrification Administration to operate an electric system in the Bauan, Batangas.

The contract, which will involve a contracted capacity of energy of 37.084 million kilowatthours for the first contract year, will be from Jan. 26, 2010 to Jan. 25, 2013.

The projected energy requirements of FBPC from APRI are expected to grow 10 percent by year 2011 and four percent by 2012.

The ERC, upon review of the contract, said it has approved an average generation rate of P3.77 per kilowatthour for APRI.