Aboitiz Power inks supply deal with Davao distributor

MANILA, Philippines - A subsidiary of listed Aboitiz Power Corp. (AP) has signed a deal to supply electricity to a Davao-based power distributor.

The new agreement will ensure the security of the power supply in Davao City and neighboring areas, the company said.

Under the deal, Therma South Inc. (TSI) will supply 100 megawatts (MW) of additional capacity to Davao Light and Power Co., Mindanao’s largest distribution utility.

Therma South is spending $546 million for a 300-MW coal-fired power plant in Southern Mindanao be completed in June 2015.

“We have the advantage of having already started our construction and we will ensure that we will build a world-class power plant that the people of Mindanao will be proud of,” said Therma South chief operating officer Benjamin A. Cariaso Jr.

“The combination of rapid economic growth in the Davao Light franchise area and the expected deteriorating supply from the National Power Corp. require us to act responsibly and secure this power now and ensure the power needs of Dabawenyos in the future,” Davao Light EVP and chief operating officer Arturo M. Milan said.

Milan said Davao Light will make sure that power delivery in the city is unhampered.

Davao Light has an estimated peak demand of 290 MW, serving more than 300,000 customers in the cities of Davao and Panabo as well as neighboring municipalities of Carmen, Dujali and Sto. Tomas.

The power supply deal will be submitted for approval by the Energy Regulatory Commission (ERC).

To date, the Mindanao grid still suffers from around four hours of rotating brownouts given a shortage of 190-300 MW.

“Mindanao is facing a critical power shortage and it will only get worse as our demand for power is increasing. TSI will deliver much needed power by 2015,” Cariaso said.

AP is investing P35 billion to add 354 MW to the Mindanao grid, 54 MW of which will come from the run-of-river hydro plants of Hedcor Inc., and 300 MW from the clean coal facilities of Therma South Inc.

It owns and operates the 747-MW Tiwi-Makban geothermal plants in Albay, two 100-MW bunker fired power barges, the 105-MW Ambuklao hydroelectric plant in Benguet and the 100-MW Binga hydroelectric plant in Benguet.

AP is the holding company for the Aboitiz Group’s investments in power generation, distribution, retail and power services.