ERC approves Napocor deal with Ilijan power plant operator
The Philippine Star
06/18/2006
The Energy Regulatory Commission (ERC) has approved the power purchase and energy conversion agreement of the natural gas combined power project of National Power Corp. (Napocor) and Hydro Electric Development Corp. (Hedcor), the operator of the Ilijan natural gas plant in Batangas.
With the ERC approval, Napocor may now include the cost of the agreement in its fuel and purchased power adjustment clause now known as the generation rate adjustment mechanism (GRAM).
The application of Napocor to include such agreement in the calculation of its cost under GRAM was filed in 2001. In Sept. 13, 2004, the ERC granted Napocor provisional authority to include the costs of the agreement in its GRAM. This new order will make permanent the provisional authority granted by the ERC to Napocor.
In its six-page order, the ERC approved energy fees to be paid by Napocor to Hedcor consisting of two components, one denominated in dollars ($0.00013 per kilowatthour) and a peso-denominated component (P0.0012 per kwh).
Aside from energy fees, the ERC also approved operating and maintenance fees which include two components ($0.76112/kwh/month and P7.25/kwh/month). Capacity fee will also be paid at a rate of $7.25376/kwh/month.
The ERC noted that with the increasing power requirements in the Luzon grid, the operation of the Ilijan natural gas power plant would greatly help Napocor meet the increase in demand and ensure the customers of sufficient and efficient power supply.
"It is also in accord with the government policy on the exploration, development, utilization, distribution, and conservation of energy resources with preference for environment-friendly and indigenous sources of energy," the ERC said.
ERC, the country’s power sector watchdog, also noted that this agreement is also beneficial to Napocor’s customers in particular and the public in general.
It said it will also encourage private participation in the power generation in line with government’s thrust.
The energy conversion agreement (ECA) is based on a build-operate-transfer (BOT) scheme whereby Kepco Ilijan Corp. (Keilco) agreed to put its resources in developing the natural gas fired combined cycle power project without substantial cash flow from the Philippine government.
The scheme involves a connection to the Luzon grid using 500 kilovolt transmission lines. The project’s planned location is on a seashore site near Arenas Point, Ilijan, Batangas.
The project would utilize a 4X200-megawatt gas turbine model M501 G and a 2X200 MW steam turbine with a contracted capacity of 1,200 MW. The cooperation period would be for 20 years with the agreement effective on Feb. 5, 1998. The project was only completed in June 5, 2002.
A careful and thorough review of the case, the ERC said it found the Ilijan natural gas combined cycle power plant will give some benefits such as government revenue in terms of royalty share; net foreign investment portfolio (including upstream and downstream operation) which in turn will create new job opportunities; quantitative benefits in terms of reduce emissions; opportunity for increasing energy reliance; and lower bills compared to existing similar plants.
06/18/2006
The Energy Regulatory Commission (ERC) has approved the power purchase and energy conversion agreement of the natural gas combined power project of National Power Corp. (Napocor) and Hydro Electric Development Corp. (Hedcor), the operator of the Ilijan natural gas plant in Batangas.
With the ERC approval, Napocor may now include the cost of the agreement in its fuel and purchased power adjustment clause now known as the generation rate adjustment mechanism (GRAM).
The application of Napocor to include such agreement in the calculation of its cost under GRAM was filed in 2001. In Sept. 13, 2004, the ERC granted Napocor provisional authority to include the costs of the agreement in its GRAM. This new order will make permanent the provisional authority granted by the ERC to Napocor.
In its six-page order, the ERC approved energy fees to be paid by Napocor to Hedcor consisting of two components, one denominated in dollars ($0.00013 per kilowatthour) and a peso-denominated component (P0.0012 per kwh).
Aside from energy fees, the ERC also approved operating and maintenance fees which include two components ($0.76112/kwh/month and P7.25/kwh/month). Capacity fee will also be paid at a rate of $7.25376/kwh/month.
The ERC noted that with the increasing power requirements in the Luzon grid, the operation of the Ilijan natural gas power plant would greatly help Napocor meet the increase in demand and ensure the customers of sufficient and efficient power supply.
"It is also in accord with the government policy on the exploration, development, utilization, distribution, and conservation of energy resources with preference for environment-friendly and indigenous sources of energy," the ERC said.
ERC, the country’s power sector watchdog, also noted that this agreement is also beneficial to Napocor’s customers in particular and the public in general.
It said it will also encourage private participation in the power generation in line with government’s thrust.
The energy conversion agreement (ECA) is based on a build-operate-transfer (BOT) scheme whereby Kepco Ilijan Corp. (Keilco) agreed to put its resources in developing the natural gas fired combined cycle power project without substantial cash flow from the Philippine government.
The scheme involves a connection to the Luzon grid using 500 kilovolt transmission lines. The project’s planned location is on a seashore site near Arenas Point, Ilijan, Batangas.
The project would utilize a 4X200-megawatt gas turbine model M501 G and a 2X200 MW steam turbine with a contracted capacity of 1,200 MW. The cooperation period would be for 20 years with the agreement effective on Feb. 5, 1998. The project was only completed in June 5, 2002.
A careful and thorough review of the case, the ERC said it found the Ilijan natural gas combined cycle power plant will give some benefits such as government revenue in terms of royalty share; net foreign investment portfolio (including upstream and downstream operation) which in turn will create new job opportunities; quantitative benefits in terms of reduce emissions; opportunity for increasing energy reliance; and lower bills compared to existing similar plants.
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