Energy body OKs supply deal between coal plant and co-op

GENERAL SANTOS CITY(MindaNews/22 August) – The Energy Regulatory Commission (ERC) has approved the power sales agreement (PSA) between the Alcantara-led Sarangani Energy Corp. and an electric distribution utility here.

In a 75-page decision signed by Zenaida G. Cruz-Ducut, ERC chairperson, and commissioners Maria Theresa A.R. Castaneda and Alfredo J. Non, the commission favored the PSA agreed by the company with the South Cotabato Electric Cooperative 2 (Socoteco-2).

The decision was dated last July 30 but a copy was only made available recently.

The document showed that Sarangani Energy will build a 120-megawatt Circulating Fluidized Bed Combustor Boiler Coal-Fired power plant in Maasim, Sarangani at a proposed cost of $280 million or P12.05 billion.

Under the 25-year PSA, Sarangani Energy would supply Socoteco-2 with 70 MW of base load power.

With supply from Sarangani Energy, electricity rate of Socoteco-2 will be P6.31 per kilowatt hour (kWh), lower than the P8.24 per kWh if otherwise, from 2017 to 2027, the ERC decision said.

The projected rate, however, does not assume increases in the cost of fuel, it noted.

Sarangani Energy plans to expand the capacity of the power plant to 200 MW for a total project cost of $450 million.

In an earlier statement, Tomas Alcantara, chairman of Alsons Consolidated Resources, Inc., said the PSA will ensure that consumers of Socoteco-2 get to enjoy “the benefits of safe, reliable and affordable energy.”

“We remain steadfast in our dedication to building a secure, ecologically sustainable, and prosperous future for the people of Socssksargen and the rest of Mindanao,” he said.

But Ryan Lariba, spokesperson of the Bagong Alyansang Makabayan–Socsksargen, slammed the ERC decision, saying the PSA “is a lopsided contract” in favor of Sarangani Energy.

“With the newly-approved power sales contract, consumers would be expecting electricity rate to go higher…[ Sarangani Energy] is a private firm, thus it is clear as crystal that it simply aims for profit, not for service,” he said in a statement.

Socoteco-2 serves this city, the whole of Sarangani and parts of South Cotabato.

Power interruptions have hit the service area of Socoteco-2 intermittently since the start of the year due to insufficient supply.

Socoteco-2 used to get 110 MW from the National Power Corp but the allocation was reduced to nearly 55 MW due to generation deficiency, Crisanto Sotelo, the utility’s technical services department chief, said in April.

To bridge the deficit, Socoteco-2 has contracted electricity from Therma Marine, Inc., a subsidiary of the Aboitiz Power Corp.

Under the PSA, Sarangani Energy proposed that power to be supplied to the cooperative will be directly connected to the utility’s transmission facilities.

Oscar Benedict Contreras III, Alsons Power Business Unit manager for communications and stakeholder relations, said that drilling activities have commenced in preparation for the actual construction of the coal-fired power plant in Barangay Kamanga.

South Korean firm Daelim Industrial Co. Ltd has been awarded the contract to construct the power plant that is expected to go on stream in 2015.

“The drilling activity is part of the geo-technical engineering study being conducted under the supervision Daelim in order to determine the condition of the soil underneath where the plant is to be built,” Contreras said.

Contreras said that the detailed design and engineering of the power station will run through the third quarter of 2012, leading to the actual erection and installation works of the power plant.

Sarangani Energy had acquired an environmental compliance certificate in 2009 from the Department of Environment and Natural Resources.

The project site sits near a world-class diving spot and is facing opposition from groups like the local Catholic Church and Greenpeace on concerns over the environment and human health. (Bong S. Sarmiento / MindaNews)