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PIA Press Release
2009/02/12

Catanduanes power supply assured

Province of Catanduanes (12 February) -- Intended to help ease the recurring power supply interruptions in the province of Catanduanes, the Energy Regulatory Commission (ERC) approved with finality the electricity supply agreement (ESA) between Sunwest Water and Electric Company, Inc. (SUWECO) and First Catanduanes Electric Cooperative, Inc. (FICELCO).

The approved base generation rate though was slashed by the regulator by P1.0355 per kilowatt hour (kWh) to P4.3792 as compared to the P5.4147 per kWh as applied for by the parties.

The cost component of SUWECO's basic selling rate, according to the ERC, shall comprise of P3.6642 per kWh capital recovery fee (CRF) and P0.7150 per kWh operation and maintenance (O&M) fee.

In the supply agreement with FICELCO, the hydropower company proposed to build three mini-hydro power projects with total installed capacity of 5.375 megawatts.

The project blueprint calls for the construction of the 2.3-MW Solong mini-hydropower project in Brgy. Solong, San Miguel; and the 1.5-MW Hitoma 1 and 1.575-MW Hitoma 2 Mini-Hydropower Projects in Barangay Obi, Caramoan.

The projects shall be financed on a 70:30 debt-to-equity ratio. The project sponsor will fok out P218.826 million from equity while the 70 per cent balance of P510.596 million shall be sourced through loans from the Philippine National Bank.

Under the terms of the ESA, SUWECO shall be supplying the agreed power supply to FICELCo over 30-year period. The capacity of the power plants, it was noted, factored in the projected 9.0 per cent annual increase in the requirements of the power utility company.

The initially-approved selling rate for SUWECO shall be enforced for the first three years; and adjustment shall be done starting on the fourth year of its operations.

In the event that the approved tariff will no longer be competitive, the ERC prescribed that the parties will have to negotiate for an adjustment in the rates; and will eventually seek ERC approval for such. (PIA) [top]

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