Power deal to boost Mindanao supply up for approval

MANILA, Philippines – A power sales agreement meant to the boost power supply in Mindanao is up for approval with the Energy Regulatory Commission (ERC).

The deal, which is between Alcantara group subsidiary Mapalad Power Corp. and the Zamboanga del Sur I Electric Cooperative (ZAMSURECO), is a 5 megawatt (MW) power sales agreement with a duration of 3 years.

In its joint application to the ERC, the two parties said that Mindanao’s generating capacity is insufficient in meeting the region’s power requirements.

“ZAMSURECO I needs to procure additional power supply that can be available at the soonest possible time. Other than supply from Mapalad Power there does not appear to be any other viable alternative for immediate power supply available to ZAMSURECO I to address the current power crisis,” the application read.

The region has daily power outages that lasts 8 hours. The brownouts are expected to worsen because of expected hike in power demand. According to state-owned think tank Philippine Institute for Development Studies, brownouts will grow longer during the summer months due to lack of new capacity. The region has a power shortfall of 294 MW. Its actual supply of 863 MW is not enough to cover the demand of 1,157 MW. 

The two groups said that the power sales deal would serve as an immediate solution to the power shortage and increase the power supply to customers of the electric cooperative.

The bulk of Mindanao’s energy supply comes from the Power Sector Assets and Liabilities Management Corp. (PSALM), which has reduced its supply commitments to distribution firms in the region.

“The lack of sufficient and reliable power supply has long been a barrier to much-needed capital invesment that would spur the local economy, not only in the franchise area of Zamboanga del Sur Electric I but also in greater Mindanao as well,” the application read.

ZAMSURECO sources 5 MW from Therma Marine Inc. and has supply contracts for a total of 38 MW with Therma South Inc., GN Power and San Ramon Power. The cooperative also a 5 MW supply contract with King Energy Generation Inc., which is expected to start operations by the end of 2013. – Rappler.com