September 15, 2022
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The ineligibility of the Energy Development Corp. (EDC) to participate in the competitive selection process (CSP) is the primary reason why consumers in host communities do not enjoy lower rates, an official said on Friday.

“We really wanted to supply power in the region, but we are ineligible to participate in the CSP due to one requirement,” said Erwin Magallanes, head of the corporate relations department of EDC’s Leyte geothermal facility.

Magallanes said he was disappointed that the EDC was disqualified to participate in the CSP in 2015 in which the Federation of Rural Electric Cooperatives (Frecor) 8 (Eastern Visayas) required a power generator to possess a “new power plant or a power plant expansion to supply its power requirements.”

He noted that because of this prerequisite, the EDC does not qualify to participate in the bidding process, considering that all the company’s power plants have already been existing for years.

The EDC clarified this after rumors spread in various communities that the power rate went up this month in Leyte even if the province hosts the geothermal power plant.

Currently, only the Leyte II Electric Cooperative (Leyeco) based in Tacloban City, and Leyeco III based in Tunga, Leyte maintain a Power Supply Agreement with EDC, which emanated from the energy generator’s amended offer to all-electric cooperatives (ECs) in the region in 2014.

“Because of this, out of 11 ECs in Eastern Visayas, only Leyeco II and Leyeco III have the present contracts from EDC through its Green Core Geothermal, Inc. geothermal facility,” Magallanes added.

It was during the reprising term of every five years when these two ECs signed up with EDC for 16 megawatts (MW) or about 50 percent of Leyeco II’s power demand, and 2.5 MW or about 80 percent of Leyeco III’s energy requirement.

The rest of their power demands are sourced from other suppliers.

Electric consumers of Leyeco II, which charges the lowest rate among the 11 electric cooperatives in Eastern Visayas, are paying PHP11.95 per kilowatt-hour (kWh), slightly lower than the PHP12.0991 per kWh in June.

The Don Orestes Romualdez Electric Cooperative, with a franchise area in the central part of Leyte, charges consumers PHP16.92 per kWh. The rate was PHP15.16 per kWh in June.

“Geothermal power prices are not volatile because they are not tied to oil and coal prices. Unlike imported and carbon-intensive coal, geothermal is the most ideal source of power not only because it supplies a clean, stable, and renewable baseload power but also because of its relatively stable price,” Magallanes said.

Coal and oil prices in recent months have been increasing due to world market prices.

This costly supply chain logistics has been causing the increase in electricity rates as 58 percent of the power in the country is supplied by coal and 2 percent from oil as of 2021, according to the Department of Energy’s website.

With the rising cost of fuel and commodities, the EDC is prepared to help reduce the power cost by participating in Frecor-8’s Emergency Power Sales Agreement bid process for the good of its customers.

“While members of Frecor-8 have signed long-term contracts, we can supply from our limited uncontracted capacity. We are prepared to offer energy from geothermal to help lower the average electricity cost of their consumers,” Magallanes added.

The EDC is First Gen’s 100 percent renewable energy subsidiary and has more than 1,480 MW total installed capacity accounting for 20 percent of the country’s total installed renewable capacity.

Unified Leyte and Green Core Geothermal, Inc. are EDC’s power supply subsidiaries. (PNA)
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