MinDA asks electric coops to review contract portfolios

DAVAO CITY (MindaNews / 14 April) – An official of the Mindanao Development Authority (MinDA) has asked the electric cooperatives in Mindanao to review their power portfolios to prevent overcontracting once the 540 MW coal-fired power plant of GNPower Kauswagan Ltd. Co. will go online in two years’ time.

During “Wednesdays at Habi at Kape” at the Abreeza of the Ayala Malls, Romeo Montenegro, director for Investment Promotion, International Relations and Public Affairs, said around 20 electric cooperatives have so far signified interest to contract from the new coal-fired power plant.

GNPower, a joint venture company between Ayala Corp.’s AC Energy Holdings, Inc. and Power Partners Ltd. Co., is located in Kauswagan, Lanao del Norte.

“What you contract now, better be sure that it is something a capacity that you will need because what we want is to avoid overcontracting,” he said. For Montenegro, “the most expensive electricity is the electricity already paid but is not being used.”

Based on the Power Purchase Agreement, Montenegro said contracts are under a 25-year lock-in period, which cannot be terminated and prevent electric cooperatives from moving to other suppliers.

He said that he encouraged the electric coops to review their portfolios as early as now as many of them have expiring contracts with diesel plants by next year, as he noted that they want them to have a flexibility in their choice until the new capacities are ready for tapping.

Montenegro said they asked the cooperatives to determine whether they would let go of diesel in favor of the coal-fired plant that will soon go online, or they may want to hold on to those diesel capacities until the coal-fired plant can actually deliver.

He is also hoping there will be no push backs in the construction of the coal plant that will cause delay in the targeted completion date by 2018.

“We hope we don’t face challenges and hurdles because that will impact in providing power to their respective franchise areas,” he said.

Montenegro said that around half of the electric cooperatives’ load requirements would be contracted from GNPower.

“It’s very important and crucial that GNPower should be able to come online as targeted, by 2018…. Otherwise, it will impact on the electric cooperatives’ capability in providing available power,” he stressed.

However, Montenegro noted that many of the electric cooperatives would still suffer from power outages even if Mindanao will have access to power supply by 2018 as these cooperatives are not yet contracted to any of the new capacities.