GMCP to sell electricity to Visayas power distributor

MANILA, Philippines - Power producer GNPower Mariveles Coal Plant Ltd. Co. (GMCP) wants to sell electricity to an Eastern Visayas-based power distributor.

In a public notice, GMCP said it applied for the Energy Regulatory Commission’s approval for a power purchase and sale agreement with Biliran Electric Cooperative Inc. (Bileco).

“At this point, the immediate issuance of a provisional authority would be critical both to the project proponent and to the distribution utilities,” the GMCP and Bileco said.

“If provisional approval is not granted, Bileco will be constrained to source their power supply or additional requirements from the Wholesale Electricity Spot Market (WESM) and Bileco and its consumers will be exposed to a bigger risk of the vilatility of the rates in the WESM,” the electric distributor said.

Prices in the WESM have recorded spiked in the past few months given the shutdown of key power plants in Luzon and Visayas.

Bileco expects electricity demand in its franchise area to continue growing while existing supply contracts are already expiring.

GMCP will sell an average of 2.127 million kilowatt-hours (kWh) every month.

Based on projected monthly average rate for 2013, the deal will allow Bileco to source cheaper GMCP electricity at P4.1646 per kWh compared with the P5.3823 per kWh from another power producer.

Bileco is the operator of the electric light and power system in the municipalities of Naval, Biliran, Almeria, Kawayan, Culaba, Caibiran and Cabucgayan, all in the province of Biliran.

GMCP, for its part, owns the 2x300-megawatt clean pulverized coal-fired power plant in Mariveles, Bataan.

The $1-billion power plant is under construction, with commercial operations to start early next year.

“The operation of GMCP of the facility is a concrete step to averting a power crisis that could hit Luzon and the Visayas by 2013 onwards,” the companies said.

“Bileco started the solicitation process of acquiring long-term power supply contracts in order to provide a continuous and reliable source of power for the member-consumers,” the distributor said.