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Power supply deal approved

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The Energy Regulatory Commission (ERC) has approved the power sale agreement between the Alcantara-led Sarangani Energy Corp. and an electricity distributor in General Santos City..

In a 75-page decision signed by Zenaida G. Cruz-Ducut, ERC chairperson, as well as commissioners Maria Theresa A.R. Castaneda and Alfredo J. Non, the commission approved the agreement with the South Cotabato Electric Cooperative 2 (Socoteco-2). The decision was dated July 30 but a copy was made available only last week.

The document showed that Sarangani Energy will build a 120-megawatt (MW) coal-fired power plant in Maasim, Sarangani at a proposed cost of $280 million, or P12.05 billion.

Under the 25-year agreement, Sarangani Energy will 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 rate without the plant, from 2017 to 2027, the ERC decision said. The projected rate, however, does not assume any increase in fuel cost, it clarified. Sarangani Energy plans to expand the capacity of the power plant to 200 MW for a total cost of $450 million.

In an earlier statement, Tomas I. Alcantara, chairman of Alsons Consolidated Resources, Inc., said the agreement will ensure that consumers of Socoteco-2 would 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.

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, had said in April.

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

Oscar Benedict E. Contreras III, Alsons Power Business Unit manager for communications and stakeholder relations, said that drilling activities have commenced in preparation for the actual construction the coal-fired power plant in Barangay Kamanga. South Korean firm Daelim Industrial Co. Ltd has been awarded the contract to build the power plant that is expected to start commercial operations 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," Mr. Contreras explained.

Mr. Contreras earlier said a detailed engineering design is expected to be completed this quarter.

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

The project site, however, lies near a world-class diving spot and is facing opposition from local church groups and Greenpeace which have cited concerns over the power plant’s impact on the surrounding environment and on human health.

By Romer S. Sarmiento




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