Philippines: GBPC's Panay Power signs 22-month supply contract with Negros co-op

Philippines: GBPC's Panay Power signs 22-month supply contract with Negros
co-op

Negros Occidental Electric Cooperative Inc. (NOCECO) yesterday signed a
22-month power purchase agreement with Panay Power Corp. (PPC), a subsidiary
of Global Business Power Corp. (GBPC), for a 12-megawatt (MW) peak load
supply.

Panay Power Corp (PPC) owns and operates four fuel oil power plants in
Iloilo and Aklan.

Jonas F. Discaya, NOCECO general manager, said the additional supply will
mostly run during peak hours from 6-8 p.m.

"But our contract is flexible so we can get from them earlier or after if
the need arises," said Mr. Discaya after yesterday's signing ceremony.

PPC won the bid with a price of P6.37 per kilowatt-hour (kWh), lower than
its competitor's P6.55/kWh offer.

NOCECO and PPC will soon file their purchase agreement before the Energy
Regulatory Commission (ERC) for approval. It will immediately take effect
upon ERC's issuance of a provisional authority.

NOCECO has about 150,000 customers in its franchise area covering the 4th,
5th and 6th districts of Negros Occidental, including the cities of
Kabankalan, La Carlota and Sipalay, which are tourist destinations. Negros
Occidental is also a major sugar-producing region.

Mr. Discaya said the additional power will address the growing demand in
fast-developing Kabankalan, as well as ensure stable rates for consumers.

"The rate from the (power) market is very volatile, so getting power from
GBPC would provide us reasonable rates," he said.

Petronilo R. Madrid, GBPC first vice president for Panay, said the agreement
marks an entry into the Negros electricity market.

"GBP has established its name in the Visayas, particularly in Central and
Western Visayas. We have dreamt of reaching out to the people of Negros. And
now we have gained access to another region in the country, which is the
Negros Island Region," Mr. Madrid said.

GBPC President Jaime T. Azurin, for his part, said: "We are guided as the
province gears up for more infrastructure development. Infrastructure
development spurs business growth, which would increase demand for
electricity," he said.

PPC operates a 72-MW diesel plant in Iloilo City, part of GBPC's aggregate
capacity of 854 MW from generation facilities in Aklan, Cebu, Iloilo, and
Oriental Mindoro.

GBPC is majority-owned by Beacon PowerGen Holdings, Inc. with a 56% share,
with JG Summit Holdings, Inc. holding 30%, and Meralco PowerGen Corp., 14%.

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Link to Original Article:
http://www.bworldonline.com/content.php?section=Corporate&title=gbpcs-panay-
power-signs-22-month-supply-contract-with-negros-co-op&id=147564

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com