Aboitiz unit plans to put up own transmission line

Therma South Inc., a wholly owned subsidiary of Aboitiz Power Corp., is seeking regulatory approval for its plan to put up its own 138-kilovolt transmission line that will connect its proposed P25-billion, 300-megawatt coal-fired power plant in Davao to the Mindanao grid.

In a filing with the Energy Regulatory Commission, APC stressed that the P80-million transmission line would be the “shortest, most viable option” to connect its generation plant to the national transmission system, particularly the Toril Substation, which is currently being managed by the National Grid Corp. of the Philippines (NGCP).

Based on the filing, Therma Marine and NGCP are moving toward the signing of a memorandum of agreement that will provide the terms that will govern the connection. Under a draft MOA, Therma Marine will be responsible for the financing and construction of the connection assets. It will also own, operate and maintain them unless it later decides to commission the services of NGCP for the operation and maintenance of the facilities.

Therma Marine added that loans would be tapped to finance the transmission line.

Bobby Orig, first vice president for Mindanao affairs of APC, said last month that the Davao coal project remained on track, with the first phase of 150 MW seen to be completed within the last quarter of 2014 and the last phase of another 150 MW by the first quarter of the following year.

Apart from additional power supply, the coal power project is expected to generate up to 2,000 direct and indirect jobs during the estimated 37-month construction period.

APC has underscored the importance of the company’s planned coal facility as this will provide reliable and affordable power, which is essential to Davao city’s growth and development.

It earlier stressed that the coal facility would also help stabilize power supply in Mindanao, because the island—which gets more than half of its electricity requirements from hydropower sources—needed to get the right mix of power from different sources to shield it from adverse weather developments such as the El Niño phenomenon.

Based on government estimates, the shortfall in power supply was expected to worsen over the next few years. By 2014, the shortage will be about 480 MW—reportedly enough to cut off the entire power supply in the cities of Davao, Cagayan de Oro, Gen. Santos, Zamboanga and Butuan.