After winning the bid through Swiss Challenge in November 2015, the Power Supply Agreement for the 26.6 megawatt project of Delta P Inc. was signed today, March 18 which gives the project closer to realization once the Energy Regulatory Commission approval is secured.
During the signing ceremony at the compound of Palawan Electric Cooperative, DPI was elated by the fact that they were able to hurdle the thorough study made by Paleco Board and its technical team in the PSA.
“Ginawa namin ang lahat para maibigay sa inyo ang pinakamurang kuryente,” Delta P Director Tito Villareal.
Villareal likewise said the project ensures a dependable source of power that could address or prevent power outages once the project comes to its full operation.
Project construction according to Delta P Project Manager Mark Ferrer will start one year after the approval of the Energy Regulatory Commission. It took almost four months, after the winning the bid, to have the PSA signed.
“Because of our commitment to Paleco and its member-consumers, Delta P has answered the call of the consumers. The timetable is one year after the issuance of ERC approval, but because we felt the urgency of the people we went ahead. We already brought engines here. We went ahead para matapos sa lalong madaling panahon (ang construction),” said the Vice-President for External Affairs of Delta P Juan Eugenio Roxas.
The newly signed power supply contract of DPI with Paleco will take effect in 2020 after their current contract expires in March 2019.
Villareal said that they will be using brand new bunker fueled engines that are now in their compound in Brgy. Sta. Lourdes, Puerto Princesa City.
Delta P Inc. is one of three independent power producers in Palawan operating a 16-MW bunker-fired power plant comprising four units of 4-MW generator sets.
Earlier, Paleco General Manager Ric Zambales said that “Delta P plant will add stability, reliability and flexibility to the grid and complement the other independent power producers.”
Paleco Board Chair Jeffrey Tan Endriga said that with the additional capacity, member-consumers of can be assured of zero blackout in the next years.
“This is a challenge to Paleco and the power providers to provide the member-consumers an uninterrupted power supply,” Endriga said.
The winning rate submitted by Delta P was P8.22/kwh which will substantially reduce the “blended” generation rate on the Palawan grid. This answers the growing concern of the consumers that the UCME subsidy will be removed in the future, forcing consumers to pay the true cost of generating electricity.
Currently, the True Cost Generation Rate (TCGR) for the Palawan grid is about P12 per kilowatt hour. However, consumers pay only P6.58/kwh. The difference of P5.4/kwh is made up by the Universal Charge for Missionary Electrification – a subsidy of about P5.4/kwh or over a billion pesos per year for Palawan.
With the addition of three small hydro plants with a combined capacity of 18Megawatts on the Langogan, Batang Batang and Kalikiagan Rivers over the next 3 years at a rate of P6.58/kwh, the blended rate will be further reduced and help buffer the impact of reducing the UCME subsidy.