Korean firm seeks guidelines for building 400mw coal plant

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Tuesday, April 5, 2011

REPRESENTATIVES of a Korean power company met with Gov. Gwendolyn Garcia and government agency heads yesterday to clarify requirements for building a 400-megawatt (mw) coal-fired power plant in Cebu.

No specific location and amount was discussed, as the investors only wanted to know what they must comply with to build the “new generation” power plant.

Heads of different government agencies briefed officials of Korean Southern Power Co. Ltd. (Kospo), Halla Engineering and Construction Corp. and Jeong Sang Construction Co.
Ltd. on the requirements and tax incentives, such as a four-year income tax shelter.


The inquiry from the prospective investors comes as the owner and operator of a coal-fired power plant apologized for causing coal dust pollution in Naga City.

The company, in a letter, reiterated that mitigating measures would be in place by the end of the month.

The letter was signed by Kepco-Salcon Power Corp. president and chief operating officer Lee Bok Yull, dated March 30, 2011 and addressed to Naga City Mayor Valdemar Chiong.

Also, other power-producing companies, which are based in Toledo City, filed yesterday a motion to dissolve the extended temporary environmental protection order (Tepo) that limited disposal of their coal combustion waste to only one dumping site.

The companies said there would be a power shortage in Cebu Province if the order is not modified or dissolved.

At the end of the meeting at Capitol, the six Korean executives, through their interpreter Kim Jun, asked for two “guarantees” should the 400-mw power plant project push through: someone to guarantee their bank loan for the power plant construction and guaranteed buyers of the power they will produce.

Lawyer Rory Jon Sepulveda told the officials the National Government will be the sovereign guarantor of the loan.

More power

But he assured them that he will provide guidelines this week on how to communicate with the National Government.

He also told them that the power plant is timely since Central Visayas is in need of additional power supply.

Garcia welcomed the entry of a new power investor.

Department of Energy (DOE) Visayas Director Antonio Labios said with its growth rate, Cebu will need additional power producer four years from now.

The entry of Kospo, if it pushes through, will be the biggest among the power producers.

Apart from Labios, heads of the Department of Environment and Natural Resources, Energy Regulatory Commission, Board of Investments, National Grid Corp. and Bureau of Customs informed Koreans officials what they need to comply with.


As to Kepco’s apology, the letter stated that “our plant is still in the construction stage and incidents like this are sometimes unavoidable.”

Chiong and some residents complained that black particles have settled on their rooftops, furniture and laundry, which coincided with the unloading of a raw coal shipment last March 9.

“However, rest assured that the agreed upon mitigating measures are presently being implemented and shall be completed by the end of April 2011," said Lee, who promised that the firm will continue to consult and coordinate with Chiong's office as the modification of their coal yard progresses.

Lawyer Joselito Ramon Castillo, on behalf of Toledo Power Co., Cebu Energy Development Corp. and Global Business Power Corp., filed a motion that “the order of the Honorable Court dated March 15, 2011 be reconsidered and set aside against them or in the alternative the temporary environmental protection order be dissolved."

He was referring to the extended Tepo on coal ash dumping, wherein Mandaue Regional Trial Court Branch 28 Judge Marilyn Lagura-Yap stopped owners and operators of coal-fired power plants in the cities of Naga and Toledo from disposing of coal ash outside their premises.

At stake

In the order, Toledo-based power producers must dispose of their coal ash only in the Barangay Landahan landfill that has been contracted with San-Vic Agro Builders.

“While coal is not necessarily hazardous, the site of the coal-fired power plant of private respondents will not be able to accommodate it where the main disposal site is unavailable,” said Castillo.

“And in such a scenario, the private respondents will be forced to stop operations, because the retention of coal ash is not safe for continued operations,” he added.

Castillo said that if the companies cease operations “by reason of its failure to dispose of its coal ash, a total of 220 mw produced by the private respondents, which is almost one-third of the total power demand of 687mw in the Cebu Province, will have to be replaced.”

He maintained that the companies are compliant with the provisions of environmental laws, and coal ash is tested through processes that are recognized by Philippine law

He said "the damages that petitioners claim to suffer, which is the alleged destruction of the environment is a mere product of their imaginations.”

Published in the Sun.Star Cebu newspaper on April 05, 2011.

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