As power supply deal extended: NORECO II, Green Core ink pact for lower rates

DUMAGUETE CITY, Philippines — The Negros Oriental II Electric Cooperative and Green Core Geothermal Inc. signed Thursday an amendment to their Power Supply Agreement for a P0.45 per-kilowatt-hour power rate reduction effective October 26, this year.

The extended term will be from December 25, 2020 to December 25, 2035 to ensure power supply security for its consumers.

The amended contract will benefit NORECO II customers as it provides for the delivery of 25MW of clean geothermal power at a reduced rate pursuant to the repricing provisions and market-based structure in the original ten-year PSA, the Energy Development Corporation said.

GCGI, a subsidiary of First Luzon Geothermal Energy Corporation, which is owned by EDC, acquired and now operates the National Power Corporation's geothermal power plants in Valencia, Negros Oriental a few years back and has since then supplied continuous power to NORECO II and other distribution utilities in the region.

The reduced rate includes the prompt payment discount that NORECO II is entitled to. This basic energy charge was already reflected in the customers' November 2014 billing statement, said EDC.

NORECO II general manager Dionefred Macahig said the electric cooperative had recently received an award from GCGI for being prompt in its payments.

Macahig said NORECO II is now happy to continue its partnership with GCGI and "we share the same mission of serving our customers better and more efficiently."

GCGI, which operates the 192.5 MW Palinpinon geothermal power plants in Valencia, Negros Oriental and the 112.5 MW Tongonan geothermal power plant in Kananga, Leyte, is the power arm of the EDC, the country's leading producer of geothermal power, said EDC in a media release.

"We're giving our customers the benefit of stable and predictable prices on top of supplying them with clean and reliable energy source. Geothermal, unlike imported fossil-fuel based sources, is insulated from costly foreign exchange rate fluctuations and global fuel price movements," said GCGI senior vice president Victor Santos in the news release.

"GCGI is committed to provide NORECO II with customized energy solutions, fair pricing, competent technical assistance and responsive customer support at all times," he said.

NORECO II supplies power to the cities of Bayawan, Tanjay and Dumaguete and 11 towns in Negros Oriental, namely, Amlan, Bacong, Basay, Dauin, Pamplona, San Jose, Siaton, Sibulan, Sta. Catalina, Valencia and Zamboanguita.

Macahig, together with Richard Tantoco, EDC president and chief operations officer, and NORECO II board chairperson Fe Marie Tagle led the signing of the amended Power Sales Agreement.

Tantoco disclosed Thursday that EDC will start implementing projects next year to strengthen their towers and ensure a steady supply of power even in time of disasters, such as that of the recent onslaught of typhoon Ruby in the Philippines.  (FREEMAN)