Corporate News

EDC skips Leyte power deal

Posted on November 22, 2013

LOPEZ-LED Energy Development Corp. (EDC) has decided not to pursue its bid to supply power from its Unified Leyte geothermal power plant, which was damaged by typhoon Yolanda (international name: Haiyan) when it hit Visayas in Nov. 8.

In a disclosure yesterday, EDC said its wholly owned subsidiary Unified Leyte Geothermal Energy Inc. (ULGEI) has informed the Power Sector Assets and Liabilities Management Corp. (PSALM) that it would not accept the award that would make it an independent power producer administrator (IPPA).

“ULGEI has written PSALM that it cannot accept the award of the winning bids as the physical and economic conditions underlying the bidding process and the IPPA administration agreements required to be executed pursuant thereto have been dramatically altered by the severe and widespread destruction caused by super typhoon Yolanda in the Eastern and Western Visayas regions,” the disclosure read.

PSALM auctioned off Unified Leyte’s contracted capacity in “strips” and “bulk” in a bidding held on Nov. 7, where ULGEI was declared as one of the highest ranking bidders.

ULGEI submitted a bid price of P5.21 per kilowatt-hour for 40-megawatt (MW) capacity under the “strips of energy” category. It also submitted a P215-million offer for the “bulk energy” category.

PSALM President and Chief Executive Emmanuel R. Ledesma, Jr. had said the highest ranking bidders will still have to undergo and pass the post-qualification stage before being declared as winning bidders.

However, EDC last Tuesday said that the Unified Leyte and 112.5-MW Tongonan geothermal power plants sustained heavy damage amid the onslaught of super typhoon, making around 650-MW of capacity unavailable.

The Unified Leyte complex -- which straddles Ormoc City and municipality of Kananga -- is composed of the 125-MW Upper Mahiao plant; 232.5-MW Malitbog plant; 180-MW Mahanagdong plant; and 51-MW optimization plants.

“The company is exerting all best efforts to return all the power plants back to service at the soonest possible time,” EDC said.

Asked about PSALM’s forward plans for the plant, Mr. Ledesma said in a text message yesterday: “We are still studying the matter.”

PSALM was formed under Republic Act 9136 or the Electric Power Industry Reform Act of 2001 to assume ownership of and manage all Napocor’s assets, liabilities, contracts with independent power producers, real estate and other disposable assets.

Meanwhile, EDC is the largest producer of geothermal energy in the Philippines. The firm currently operates 12 power facilities in five geothermal service contract areas in the country.

The company, through First Gen Hydro Power Corp., also operates the 132-MW Pantabangan-Masiway hydro power plant in Nueva Ecija.

It is also building the 87-MW Burgos wind power project in Ilocos Norte, which is expected to be operational next year.

EDC’s net income sank 30.8% to P5.93 billion in the nine months to September from P8.57 billion in the same period last year.

Sales of electricity slipped by 7.7% to P19.78 billion from P21.44 billion, while cost of sales of electricity likewise dropped by 6.7% to P7 billion from P7.5 billion.

Shares of company closed at P4.37 apiece yesterday, down three centavos or 0.68% from its close of P4.40 apiece on Wednesday. -- Claire-Ann Marie C. Feliciano