Cepalco rates to go down with Minergy Coal Plant

Jul 25, 2013


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CAGAYAN DE ORO CITY-   Once the Cagayan Electric Power and Light Company starts drawing power from its affiliated coal-fired power plant in Balingasag, Misamis Oriental, power rates in its franchise area covering Cagayan de Oro City and the Misamis Oriental municipalities of Tagoloan, Villanueva and Jasaan are expected to decrease.


CFB Coal Plant in Germany like the one Minergy wants to put up in Balingasag.


CEPALCO has filed with the Energy Regulatory Commission (ERC) an application for the approval of its Power Supply Agreement (PSA) with affiliate Minergy Energy Systems, Inc. and for the construction and operation of a 138-kv line to connect the proposed Minergy power plant to its distribution system that company officials claim will substantially lower power rates within its franchise area when it starts operations by 2017.


Asst. City Legal Officer Reymond Villablanca stresses a point during the Cagayan de Oro City Council Energy Committee meeting chaired by Kag. Bong Lao held July 22 at the SP Session Hall. The meeting discussed various matters affecting the Cagayan Electric Power and Light Company (CEPALCO). Also in photo are Mike Banos, president of Konsumanteng Kagay-anon, Inc. (KKI), Atty. Isidro O. Baculio, Jr., legal officer, CEPALCO; and Cepalco execs Ralph Paguio and Chit Capili. (BWM News Photo)


“In compliance with ERC regulations, we asked three suppliers to submit tenders for baseload power supply provision,” said Jaime Rafael U. Paguio, senior vice president during a July 22 meeting with the City Council Energy Committee chaired by Councilor Teodulfo Lao, Jr. “Supplier A quoted PhP 3.63 per kilowatt hour (kWh), Supplier B PhP 3.77 and Minergy submitted the lowest at PhP 3.56/kWH.”


Mindanao Energy Systems, Inc. [MINERGY] is an Independent Power Producer [IPP] that became the first IPP in the region to sell directly to a private distribution utility when it started operations in 1992. Its diesel power plants were expanded to 43MW last year and it also operates the 8MW Cabulig mini hydroelectric plant to supply back up power to Cepalco and other DUs and industrial clients.


As an “embedded” power plant, Mr. Paguio said the Minergy coal plant would supply its entire 110-megawatt (MW) output to CEPALCO thus ensuring the quality and reliability of the utility’s power supply. It would approximately 50 percent of the utility’s baseload power needs.


The power plant will have two units of 55MW coal fired boilers using the circularized fluidized-bed combustion (FBC) which are more effective than earlier technologies for coal fired power plants, emit less greenhouse gases than oil-fired power plants and require less external emissions capture units.


Chiquita C. Capili, executive vice president & controller, said the tender assures Cepalco consumers of the cheapest and most reliable power supply over which it will be able to exercise control as an “embedded power supply” and avoid additional transmission costs to the benefit of all consumers.


Mr. Paguio told the City Council Energy Committee it needs to contract additional power to address Cepalco’s power demand forecast by 2017 and uncertainty whether its power supply contract with the National Power Corp/PSALM that expires on March 25, 2015 can still be renewed at its present level.


At present, Cepalco sources up to 90 percent of its baseload power from NPC/PSALM, with the balance sourced from Minergy, FG Bukidnon Power Corp.’s Agusan River Hydro Electric Plant (1MW), and Cepalco’s solar power plant (1MW). It currently sources the bulk of its power supply from the National Power Corporation/PSALM at a price of PhP 3.85 including transmission and wheeling charges.


The utility also has an additional 24.6MW it can tap from various customers through its Interruptible Load Program (ILP).


As of 2012, Cepalco’s website states it has 119,936 customers, of which 103,074 are residential, 16,396 commercial, 270 industrial, 151 bulk power and 181 streetlights.



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