DMCI power unit signs supply deal with Paleco

The Consunji-led DMCI Power Corp. has signed a 15-year power supply agreement with the Palawan Electric Cooperative (Paleco), a move that will help ease the tight power supply and address the growing demand in the province.

Parent firm DMCI Holdings Inc. made the disclosure to the Philippine Stock Exchange Friday as it reported that its power subsidiary also received a formal notice of award from Paleco to supply 25 megawatts in gross dependable capacity.

The company will be providing the capacity through the 27-megawatt diesel-fired power plant that it will be putting up at a cost generation rate of P9.38 a kilowatt-hour.

DMCI Power president Nestor Dadivas earlier said that the company was targeting to start commercial operations of the 27-MW diesel facility in Palawan by Sept. 1 next year.

Dadivas had said that DMCI would also be putting up a 15-MW coal-fired power plant on Oct. 26, 2014, and another 15-MW coal facility by January 2017 to address the growing power demand in Palawan. All the capacities to be generated by the two facilities would likewise be purchased and used by Paleco, Dadivas had added.

DMCI Power has since expressed interest to put up power facilities within the off-grid areas such as Palawan, which are being served by state-run National Power Corp.’s missionary electrification arm, the Small Power Utilities Group (SPUG).

Aside from Palawan, DMCI Power chair Isidro Consunji said the company was planning to put up diesel-fired and small coal facilities in Mindoro and on Tablas Island in Romblon, .

With the move to allow private sector investors like DMCI Power to enter the off-grid SPUG areas to build, own and operate generation facilities, the government will soon be able to bring down the power rates for customers serviced by the main grids who also shoulder part of the cost of the subsidy program for those areas.

The subsidy is recovered from main grid customers through the universal charge for missionary electrification (UCME) component in their power bills.