Firm gets go-ahead to operate power plant

The Energy Regulatory Commission has allowed Desco Inc., a local provider of petroleum and geothermal products and services, to start operating its 1-megawatt Libertad natural gas-fired power plant in Bogo City, Cebu.

According to the ERC, it issued a certificate of compliance to Desco after finding the company compliant with technical, financial and

environmental standards and other pertinent rules and laws.

“The ERC positively notes the use of Desco of natural gas since such is an indigenous resource.

Desco will augment vital power supply in the Visayan region.

Having power stability leads to further economic growth that will help upgrade the lives of the citizenry,” said ERC Chair Zenaida G. Cruz-Ducut.

Desco’s gas-fed power plant is embedded in the distribution system of Cebu II Electric Cooperative Inc. (Cebeco II) through a distribution feeder.

The ERC disclosed that the plant testing and commissioning were

already completed in October this year, but Desco could only start full commercial operations upon the agency’s issuance of the COC, which is valid for five years, and the approval of its power purchase agreement (PPA) with Cebeco II, which is in the final stage of negotiations.

Desco’s natural gas facility will make use of the gas from the

Libertad field, covered by Service Contract 40 and is operated by UK-based Forum Energy Plc.

Forum Energy, through its majority-owned unit Forum Exploration Inc., and Desco signed in 2009 a gas sale and purchase agreement (GSPA) to develop the gas field for power generation. The GSPA was approved by the Department of Energy in July 2009.

Under the agreement, Desco had to install a 1- to 1.5-MW power-generating unit in Bogo, Cebu, using GE Jenbacher gas engines.

Desco was incorporated and duly registered with the Securities and Exchange Commission (SEC) in December 1974. Its primary purpose is to engage in the business as general contractors and builders of buildings and industrial plants and facilities. One of its secondary purposes is to engage and venture into the power generation business through the sale and distribution of power-generating units and spare parts and the servicing of these generating units and to engage in the sale of electricity through the operation of power-generating units.