CASA's ‘Project Co-Gen’: 'Power' to the people yet when?
The National Transmission Corporation
and Panay Diesel Power Plant complex
in Dingle, Iloilo where bulk of power
requirements for the province's three
electric cooperatives come from.
Central Azucarera de San Antonio (CASA), a major player in the nation's world of business. Antonio Steven L. Chan, CASA president and recently honored as one of the Most Inspiring Ilonggo Entrepreneurs. The Chan siblings, recorded as one of the country's biggest sugar traders. CASA's 15 megawatt eco-friendly power plant with excess power of 6 megawatts. Put together, welcome to ‘Project Co-Gen.' Excess power to the people. And at a significantly lower rate too.
Last October 31, 2006 no less than former Energy Secretary Raphael Lotilla and Sen. Franklin Drilon inaugurated the Central Azucarera de San Antonio and its 15-megawatt (MW) biomass co-generation plant.
Nine megawatts of the plant's output will be used by the sugar mill. The remaining five megawatts will be sold to outside users. The power plant's generators will be run by bagasse, a sugarcane residue.
Over three years in the making, Project Co-Gen was designed to augment power primarily to Iloilo Electric Cooperative 2 (Ileco 2).
Ileco 2 is the host-Distribution Utility (DU) of CASA's home, the P1.5 billion sugar central facility strategically located at Barangay Cadilang, Passi City. (Business World in its online news (April, 2008) disclosed CASA's authorized capital stock of 1.5 million shares with a par value of P1,000 apiece.)
Of latest count, Ileco 2 has 72,200 consumer-members from 14 Iloilo towns and said component city. These include residential, industrial and commercial clients in Pototan (7,140), Dumangas (6,431), Passi City (4,830), Barotac Nuevo (4,533), Janiuay (4,435), Lambunao (4,134), Calinog (3,970), Dingle (3,789), Dueñas (2,634), Badiangan (2,456), New Lucena (2,315), San Enrique (2,198), Zarraga (2,088), Mina (1,874) and Bingawan (978).
Total Ileco 2 base load is pegged at 12 megawatt with peak load at 18 megawatt. Currently, Ileco 2 has a 13.2 megawatt capacity sourced from the government's National Power Corporation (NPC) through the National Transmission Corporation (TransCo).
Beset with recurring problems from NPC's Visayas Grid, Ileco 2 when presented with Project Co-Gen almost immediately embraced the plan.
Chan in an interview told The News Today (TNT) informal talks began late of 2005. Yet it was to be in early 2006 that official communications happened.
April 06, 2006, Chan wrote Ileco 2 management, happy to report that as per "various conversations," CASA have finalized plans for the establishment of a Co-Generation Plant. Thus, the birth of an offer for Power Supply Agreement (PSA).
Ileco 2 for its part responded in the ensuing months with then General Manager Ramon Apura Sr. manifesting the cooperative's interest. A committee was then created to study the proposal in the hope to arrive "at an acceptable Power Purchase Agreement (PPA)."
The PSA being the first to be negotiated by Ileco 2 in its 30 years of existence eventually met reservations from members of the committee.
"How will CASA ensure the reliability of power to be supplied to Ileco 2 and what is the possible penalty in case it cannot be met?," came the first concern followed by the second point raised. "Ileco 2 prefers that CASA will assume the payment of expenses on the modification of switchyard at Ileco 2 substation."
More talks and discussions that dwelt on technicalities and legalities. Chan meantime was clear and resolute of his intent, "CASA has excess power that we want to supply to Ileco 2 and other electric cooperatives at low cost."
Supply period is during milling season – November to May -, a period that Ileco 2 admits they are in need of back-up power source.
Lawyer Dennis Ventilacion, Ileco 2 vice president lengthily spoke to TNT about the cooperative's involvement with Project Co-Gen. He began by saying that the power supply agreement has since been drawn in March this year.
"I was even telling Steven (Chan) if we can have it approved this harvest season, we will get more than the 1 megawatt we initially asked. We are slated to have a load shedding (rotation of brownouts) and so there is lack of enough power because of a trouble in the NPC plant in Palinpinon and Negros. We in Panay Island is at the tail-end of the Visayas Grid that includes Leyte, Cebu and Negros. We have no objection to the project. We welcome it as it will augment the power supply we lack and the price offered to us – P3 per kilo watt hour – the cost is less than the prevailing NPC rate and TransCo combined cost," Ventilacion said.
So why then the delay for Project Co-Gen to fully take-off?
Chan decried what he felt were unjust delays caused by Ileco 2 pointing to the recent offer of said cooperative to purchase the TransCo subtransmission line subject of Project Co-Gen.
Within legal bounds, yes, Chan agreed, yet he lamented the manner it was purportedly done.
Ventilacion when asked for clarification on the matter was upfront and obliging with his explanation. He was also quick in elaborating that Ileco 2 made necessary adjustments and compliance. The word was to be "deferment," subject of an August Resolution from the Ileco 2 Board sent to the Energy Regulatory Commission (ERC).
As government provision would have it, final say for Project Co-Gen needs ERC approval.
Ventilacion further shared that the power supply agreement between CASA and Ileco 2 perfected in March was with Chan and then Ileco 2 President Rene Parco Sr. as signatories.
"But it is not easy to get the ERC approval. We are optimistic though and hope that Ileco 2 can avail of CASA's offer," he said.
Contrasting sentiments from Chan who shared his dismay on the continued delay he blamed primarily on the subtransmission-planned purchase of Ileco 2.
"I feel that they have prejudiced the interests not only of Ileco 2 consumers but the entire Panay Island who stands to benefit from the excess power we are offering. Greater good for the greater majority, that is all that I want. And now the greater majority's interests are being sacrificed," Chan said.
To note, further targeted for Project Co-Gen's reach are Ileco 1, Ileco 3 and even Iloilo City's Panay Electric Company (Peco).
"The beauty of our contract with CASA is that there is no guaranteed minimum and maximum load demand which is beneficial to consumers… as far as we are concerned, and we are hoping for it so we can buy power from CASA… Project Co-Gen is a go... we are just ironing out certain technicalities… you see other than CASA, we have no other options, nowhere to buy additional power. We need CASA certainly. And I know that Steven wants to spread the low cost benefits to the cooperatives, that is what he is doing right now," Ventilacion added.
Meantime, Chan awaits ERC approval so direct-tapping agreements will be resolved. In his desire to have Project Co-Gen take off, Chan took it upon himself to make continuous follow-ups with TransCo's Generimo Senal, Assistant Vice President for Corporate Planning and the ERC directly to ERC chair Rodolfo Albano Jr.
To Chairman Albano he wrote about CASA's request for direct connection to TransCo saying "This will provide the flexibility to supply back-up power/ancillary service to the Panay Grid and/or execute bilateral power supply contracts with various customers or aggregators within the Visayas Grid."
As he stressed, "Greater good for the greater majority and cheaper power for all."
CASA and Ileco 2. CASA and ERC. NPC and TransCo. Project Co-Gen. Will it happen for them and elsewhere in Panay Island this November?
"Power for the people" seemingly at the mercy of ERC. Or was it actually true when presented early on to ILECO 2?
"Confident the rates we offer are advantageous to you and your customers… we eagerly look forward to a concrete and positive response…," came Chan's yet to be heeded message in November 2007.