Leased power plants to cost $200m

PRIVATE power distributors will lease diesel-powered generators to produce 200 megawatts of electricity a day in Mindanao to add to the grid, which has been producing less power than needed as a result of a drought, an official said Monday.

The extra power to be produced will cost around $200 million for one year, which translates to $1 million per megawatt or P5.25 per kilowatt hour.

By comparison, power distributor Manila Electric Company’s generation charge for March was 5.84 a kilowatt hour—or a total charge of P8.61 a kilowatt hour if the distribution, transmission, and system loss charges were added.

Mindanao has been suffering daily power outages because its hydroelectric plants have been made idle by the drought.

But at least two generators capable of generating 35 megawatts would arrive in two to three weeks once a lease agreement was finalized, Executive Secretary Leandro Mendoza said.

The rest would arrive in two months, but the government and the private firms belonging to the Mindanao Electric Power Alliance were looking at leasing 700 megawatts until December to cover the power deficiency in Mindanao.

“This [power deficiency] will last longer than expected. Even if the rains come in June, the volume might not be enough to operate the hydropower plants,” Mendoza said.

Guido Delgado, a former president of the state-run National Power Corp., said the lease of the generator sets to produce 200 megawatts and the fuel to run them would cost around $200 million for one year.

He said the generators could produce 15 to 20 megawatts each, and they would be sourced from Singapore, the United States and Australia and initially deployed in South Cotabato, Zamboanga City and General Santos City.

Delgado’s figure was double the amount announced by President Gloria Arroyo that would be lent to private firms producing extra power.

Mrs. Arroyo, who placed Mindanao under a state of calamity Tuesday last week after the power deficiency breached 700 megawatts, said Land Bank of the Philippines and Development Bank of the Philippines would make available at least $100 million to Mindanao’s power distributors. –Joyce Pangco Pañares, Manila Standard Today