Govt expects to raise P2b from Leyte thermal plant
Friday, June 16, 2006
By Joyce Pangco Pañares and Alena Mae S. Flores
THE government expects to raise an additional P2 billion after the Philippine National Oil-Energy Development Corp. took over management of the 130-megawatt Upper Mahiao geothermal power plant in Leyte.
In simple ceremonies held at Malacañang with President Gloria Macapagal Arroyo as guest of honor, CE Cebu Geothermal Power Co., a wholly-owned subsidiary of Mid American Energy Holdings Co., turned over ownership of the power plant to PNOC-EDC.
The physical transfer will take effect on June 25, the end of the two parties’ 10-year cooperation period.
PNOC president Eduardo Mañalac said the PNOC-EDC is expected to post a total income of about P10.5 billion this year, about 18 percent higher than last year’s P8.64 billion, with the turnover of the geothermal plant after the 10-year build-operate-transfer deal with CalEnergy expired this month.
“The PNOC will have reduced liabilities after this turnover because they no longer have to pay CalEn in dollars for operating and maintaining the plant,” Energy Secretary Raphael Lotilla said.
The transfer agreement was signed by PNOC-EDC president and chief executive officer Paul Aquino and CE International Ltd. Philippines president Joseph Sullivan.
Aquino told reporters during the turnover ceremonies that the agreement will result to lower cost for the company, which would eventually redound to better revenue stream.
With the turnover to government, he said PNOC-EDC will no longer pay for energy conversion fees and build-operate-transfer payment.
“PNOC-EDC gives this plant steam. Then, I get all of the electricity that is converted from the steam. Now, I pay CalEn the energy conversion fee—the fee for them converting my steam into energy. Our revenues would remain the same, it’s just that my cost would become lower,” Aquino said.
Geothermal energy now provides some 13 percent of the country’s electricity, and the Leyte plant supplies 70 percent of the power consumption in the Visayas region, Lotilla said.
Under the BOT scheme, Upper Mahiao sold 100 percent of its capacity to PNOC-EDC for resale to National Power Corp. and distribution to Cebu province via an underwater transmission cable.
“This is good news because we no longer have to pay for somebody else to operate this 130-megawatt plant,” Lotilla added.
Mrs. Arroyo lauded the turnover and said the PNOC-EDC’s takeover of the Leyte geothermal reservation will bring the country a step closer to energy independence.
The Upper Mahiao geothermal plant has been operated for the past 10 years by CE Cebu Geothermal Power Co., a Philippine corporation owned by the California Energy Co. Inc.
The construction of the geothermal plant was made possible through the controversial Republic Act 7718, or the expanded Build-Operate-Transfer Law of 1993.
Upper Mahiao is one of the three BOT power plants operating in the steam fields of PNOC-EDC in Leyte. It holds the record of being the largest geothermal power plant in the world that utilizes the geothermal combined cycle units technology in a single powerhouse.
posted by philpower @ 7:31 AM,
