Power firms await ERC approval on supply deal

The Visayan Electric Co. (VECO) and Unified Leyte Geothermal Energy Inc. (ULGEI) have sought the approval of the Energy Regulatory Commission for their power supply agreement.

Both firms filed their PSA application last August 24, 2015.

ERC said in an order that ULGEI should supply VECO 5 megawatts (MW) of power from its geothermal power plant for the latter's supply needs, based on the agreement. ULGEI is a subsidiary of Energy Development Corp. while VECO is jointly owned by Aboitiz Power Corp. and Vivant Corp.

"ULGEI shall supply and deliver contract energy, whether from the capacity of the power plant or another power plants owned and operated by any of its affiliates, the WESM (Wholesale Electricity Spot Market) or other administrator, to VECO to be delivered in accordance with contract energy schedule at the delivery point," ERC stated.

According to ERC, the agreement will have a period of seven years.

The order also noted that VECO shall pay a generation payment rate of P4.6629 per kilowatt-hour (kWh) for the power supply every billing month. The ERC, however, also noted that the rate may be changed due to some factors that affect its computation such as the foreign exchange rate, US price index for capital requirement, and consumer price indices in the US and National Capital Region.

Aside from the generation rate, VECO should also pay an administration fee at P0.32 per kWh, which can be affected by annual inflation movements.

Moreover, VECO also entered into an agreement with Southwest Luzon Power Generation Corp. for the latter to supply 50 MW of VECO's electricity needs. Both have already sought ERC's approval.

Jurisdictional hearings are set on October 29 at the ERC Visayas office in Cebu City for the two joint petitions.

VECO, the country's second largest distribution utility, distributes electricity in the towns of Consolacion, Minglanilla, San Fernando and Lilo-an, and cities of Naga, Talisay, Cebu and Mandaue in the Province of Cebu. SLPGC, on the other hand, is a wholly owned subsidiary of Semirara Mining and Power Corp. —