Aneco, Agusan Power apply for ERC approval of power purchase agreement

Agusan del Norte Electric Cooperative (Aneco), and Agusan Power Corp. (APC) have filed applications with the Energy Regulatory Commission to approve a power purchase agreement between the two companies. Both companies applied for the approval of the 25-year power purchase agreement at P6.60 per kWh (P5.50 per kWh for capital recovery fee and P1.03 per kWh for operation and maintenance fee). Aneco is the main electricity supplier to the province, incuding Butuan City and Cabadbaran City. APC is the developer of the P3.6-billion, 25-megawatt Lake Mainit hydropower project in Jabonga, Agusan del Norte. In its application, Aneco said that the Mindanao grid is facing a deficit in its power supply that is certain to worsen over time, and the region’s generating capacity is no longer sufficient to meet the required capacity. Aneco's power requirements are currently supplied by National Power Corp. and Therma Marine Inc. of the Aboitiz Group. State-owned Napocor informed Aneco said it can no longer meet its contracted capacities in Mindanao. "To address the need for adequate and reliable supply, Aneco conducted a competitive procurement. APC submitted the lowest bid in terms of energy and transmission charges per kWh...Consequently, the proposal of APC was deemed the most advantageous and beneficial to Aneco end uses and the parties entered into a PPA," the parties said. APC will put up a run-of-river power plant using water from Lake Mainit. The plant will be a "must run" unit—meaning that the plant's output should always be dispatched. According to the firms’ application at the ERC, the plant will be embedded within Aneco's distribution system and will bring a reduction in system loss to the electric cooperative. It will also provide voltage support to Aneco's distribution system and savings to end-consumers by avoiding transmission charges. The companies also claim that the project will also reduce the magnitude and frequency of seasonal flooding during heavy rainfall in the area. The flooding in Lake Mainit covers around 60,000 hectares and results in annual economic losses of P968 million. APC is controlled by Tranzen Group, owned by businessman Salvador Zamora II. Tranzen has numerous projects lined up greenfield geothermal projects, a hydropower project and methane power plants. — BM, GMA News