Ronnie C. Roa | August 7, 2022
“We really wanted to supply power in the region but we are ineligible to participate in the CSP (Competitive Selection Process) due to one requirement”, thus explained Engr. Erwin B. Magallanes, the head of the Corporate Relations Department of the Energy Development Corporation (EDC) Leyte geothermal facility during a Zoom press conference July 26.
Magallanes lamented EDC’s disqualification to participate in the CSP bidding in 2015 when the Federation of Rural Electric Cooperatives of Region 8 (FRECOR-8) required the power generators to at least possess a “new power plant or a power plant expansion to supply its power requirements.”
Due to this requisite, EDC didn’t qualify to participate in the bidding procedures considering that all of the company’s power plants have been existing for years already.
Currently, only Leyte Electric Cooperative (LEYECO) II and III based in Tacloban City and Tunga, Leyte respectively maintained the Power Supply Agreement (PSA) with EDC which emanated from the energy generator’s amended offer to all Electric Cooperatives (EC) in the region in 2014. “Because of this, out of 11 ECs in region 8, only LEYECO II and LEYECO III have the present contracts from EDC through its Green Core Geothermal, Inc. Geothermal Facility” added Magallanes.
It was during the reprising term of every five (5) years when these two ECs signed up with EDC’s 16-megawatts or around 50% of LEYECO II’s power and 2.5-megawatts or an estimated 80% of LEYECO III’s power demand. The rest of their power demands are sourced from other suppliers.
Magallanes disclosed that the current generation cost of EDC is pegged at P5.80. Being taken from a renewable energy source, the global inflation just slightly affects its operation cost, particularly on the plants’ damaged equipment that is purchased overseas.
“Geothermal power prices are not volatile because they are not tied to oil and coal prices. Unlike imported and carbon-intensive coal, geothermal is the most ideal source of power not only because it supplies a clean, stable, and renewable baseload power but also because of its relatively stable price” Magallanes went on.
Coal and oil prices in recent months have been increasing due to world market prices. This costly supply chain logistics has been causing the increase in electricity rates as 58% of the power in the country is supplied by coal and 2% from oil as of 2021, as per the Department of Energy’s website.
However, with the rising cost of fuel and commodities, EDC is prepared to help lower the power cost by participating in FRECOR-8’s Emergency Power Sales Agreement bid process for the good of its customers.
“While the members of FRECOR-8 have signed long-term contracts, we can supply from our limited uncontracted capacity. We are prepared to offer energy from geothermal to help lower the average electricity cost of their consumers,” added Magallanes.
Moreover, EDC also shares royalty tax aside from the real property tax (RPT) that benefits the host communities and since EDC sources its energy from geothermal sources, a renewable energy source, it is exempted from value-added tax (VAT) which consumers enjoy.
Magallanes likewise relays this message to FRECOR-8 on behalf of EDC: “Let’s continue to work together to find ways to bring down the electricity rates in our region.”
EDC is First Gen’s 100% RE subsidiary and has over 1,480-MW total installed capacity that accounts for 20% of the country’s total installed RE capacity. Unified Leyte and Green Core Geothermal, Inc. are EDC’s power supply subsidiaries.
Renewable energy leader Energy Development Corporation (EDC) has reiterated its commitment to continue helping Region 8 not only build its climate resilience and triumph over the COVID-19 pandemic but also to find ways to bring down its power rates.
Aside from LEYECO II and LEYECO III, the other FRECOR-8 ECs are Don Orestes Romualdez Electric Cooperative, Inc.(DORELCO), Leyte IV Electric Cooperative, Inc. (LEYECO IV), Leyte V Electric Cooperative, Inc. (LEYECO V), Southern Leyte Electric Cooperative, Inc. (SOLECO), Biliran Electric Cooperative, Inc. (BILECO), Samar I Electric Cooperative, Inc.(SAMELCO I), Samar II Electric Cooperative, Inc.(SAMELCO II), Eastern Samar Electric Cooperative, Inc.(ESAMELCO), and Northern Samar Electric Cooperative, Inc.(NORSAMELCO).
LEYECO V covers the franchise area in Leyte where EDC’s biggest geothermal site has been operating for almost 40 years.
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