Mindoro geothermal deal cited as ray of hope in power woes

Three electric cooperatives in the Bicol region are among those that Energy Secretary Jericho Petilla cited as problematic as he welcomed the entry of a new player in the renewable energy sector, a planned geothermal plant in Mindoro Oriental.

In a speech at the signing ceremony for a power supply agreement between the Oriental Mindoro Electric Cooperative (Ormeco) and Emerging Power Inc. (EPI), a renewable energy firm, Petilla said the Albay Electric Cooperative (Aleco), Sorsogon Electric Cooperative 2 (Soreco 2) and Sorsogon Electric Cooperative 3 (Soreco 3) are among the electric cooperatives facing a host of problems that affect the delivery of power to consumers.

Another problematic cooperative, said Petilla, is Davao del Norte Electric Cooperative Inc. (Daneco).

Aleco faces disconnection again by the National Grid Corp. of the Philippines (NGCP) over unpaid bills.

NGCP on Jan. 27, however, put off the planned disconnection of Aleco upon the request of Bishop Joel Baylon of the Diocese of Legazpi, who chairs the Aleco Interim Board (Ibod).

Augusto Villalon, Ibod spokesperson, said Baylon wrote a letter to NGCP seeking to defer the disconnection as negotiations with San Miguel Energy Corp. (SMEC), the new concessionaire of Aleco, are ongoing.

In his letter, Baylon said Ibod is working on paying the unpaid bills. At least P66 million of the bills for the months of October to December would be assumed by SMEC under its agreement with Aleco Ibod and P33 million would be settled.

Villalon said Aleco has paid NGCP P6.5 million in initial payment.

SMEC’s entry into Aleco has been approved in a referendum by consumers. It, however, faced strong opposition from the Aleco Employees Union and Aleco Multisectoral Stakeholders Organization (Amso) who went on strike starting in September.

Villalon said Aleco could have settled its debts had the strike not taken place. The labor department assumed jurisdiction over the labor row on Jan. 13 and issued a return-to-work order.

In his speech at the signing of the deal between Ormeco and EPI for the 40-megawatt Montelago geothermal plant in Naujan, Mindoro Oriental, Petilla said “there are so many problems in the Philippines regarding electric cooperatives.”

“In comparison, Ormeco is well-managed,” said the energy chief. “So when I arrive here, I am not greeted by problems. I am greeted by signings. These are the events I prefer to attend,” he said.

The $180-million project is being undertaken by EPI and negotiations are ongoing for partial funding from the Netherlands Development Finance Company (FMO).

“Ormeco and Mindoro are definitely in the lead. I want Mindoro to be set as an example for the entire nation,” said Petilla, addressing his speech to the cooperative’s officials led by Audel Arago and Romeo Cuasay, president and general manager.

Petilla said the Mindoro geothermal project by EPI would remove the need for Metro Manila consumers to subsidize the power needs of Mindoro.

“When business in Mindoro grows, Metro Manila consumers have to pay for the increase in its electricity consumption through a subsidy,” Petilla said.

“But through this agreement, through this project, there will no longer be any need for a subsidy,” said Petilla.

“Not all areas of the Philippines have the resources and potential for geothermal energy, which is stronger than other renewable energy sources like wind and solar,” the energy secretary added. “Wind and solar cannot match the 40 megawatts that the Montelago geothermal power plant can produce.” With a report by Mar Arguelles, Inquirer Southern Luzon