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Friday, July 07, 2006
Veco moves bid date for future supply deal
The Visayan Electric Company Inc. (Veco) has indefinitely postponed the bidding for its 200-megawatt (mw) future supply requirement.
Veco, in a statement furnished to Sun.Star Cebu yesterday, said it is still “reviewing and reassessing its options to find the best combination of reliability and prices for its consumers.” The power distribution firm did not elaborate further.
Veco was supposed to hold the bidding for its supply requirement for years 2010 to 2011 last June 5.
Despite the postponement, Veco assured customers that it will stick to its commitment to provide stable and secure electricity through its existing supply contracts with the National Power Corp. and independent power producers.
New plants
Veco had been soliciting bids for the supply requirement from new capacity power generation plants.
In an earlier statement, the power distribution utility said plants have to be established under the build-operate-maintain scheme and must be capable of operating on baseload mode.
“They (investors) can propose any technology, fuel mix or plant configuration that would meet Veco’s requirements. The plant shall have a gross capacity of 100 megawatts by Jan. 1, 2010 and an additional gross capacity of 100 megawatt by Jan. 1, 2011,” the utility firm said in the statement.
The supply contract between the winning bidder and Veco will have a term of 25 years.
The operation of a new capacity generation plant would help stabilize the power supply situation in areas serviced by Veco.
Veco said the power generation plants must be located within Cebu island “to ensure the long-term reliability and supply of electric power” to its costumers at reasonable rates.
Interest
After the investor registration deadline, four firms have expressed interest in the project. These were Mirant, Kepco-Salcon Power Corp., Applied Research Technologies Philippines Inc. and Pacific Manufacturing Resources.
But Mirant has discarded plans to build new power plants in Cebu. Mirant has also sold all of its stake in the Toledo City power plants to Global Business Holdings Inc., an affiliate of Metropolitan Bank and Trust Co.
Veco corporate communications officer Ethel Taneo-Natera said this development has also affected the bidding.
Global Business Holdings, in a financial statement filed with the Philippine Stock Exchange for the first quarter, cited expansion projects of Mirant Global Corp. in Boracay and Aklan. There was no mention of new projects in Cebu.
Shortly after announcing the bidding, Veco’s plan for additional supply had been the subject of controversy, specifically involving the Cebu Provincial Government.
Gov. Gwendolyn Garcia questioned Veco’s condition that the two separate plants will produce the 200-mw requirement, each with a capacity of 100 megawatts. The governor had said the condition will disqualify Kepco-Salcon from the bidding.
Veco’s franchise area covers a total of 672 square kilometers with over 295,000 households or an estimated population of over 1.5 million.
By year 2010, Veco predicts power demand for its franchise area will go up to about 354 megawatts, which is why it needs additional supply.
Veco distributes power in Metro Cebu and neighboring municipalities. (LAP)
For Bisaya stories from Cebu. Click here. (July 7, 2006 issue)
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