THE ENERGY Regulatory Commission (ERC) has approved “with modification” the electricity supply agreement between Dagupan Electric Corp. and solar farm developer SunAsia Energy, Inc., which is planning to build a 20-megawatt peak (MWp) solar power plant in Pangasinan.
In their joint application with the ERC, the contracting parties said they had entered into the supply agreement to address the increasing power supply requirements of the distribution utility and to reduce its exposure to the wholesale electricity spot market, where prices may not always be stable.
Under the electricity supply agreement (ESA), SunAsia will install, construct and operate the embedded solar power plant in Brgy. Efre, Santa Barbara, Pangasinan. The ESA will be implemented in two phases at 10-MWp each stage.
In its decision, the ERC said the applicable fee to be collected from consumers under the ESA is P4.58 per kilowatt-hour (kWh) as capacity recovery fee (CRF) and P2 per kWh for operations and maintenance (O&M) fee, which is subject to price adjustment.
“In the absence of a capital cost component being financed by foreign denominated loans, the Capital Fee should be fixed for the duration of the life of the plant. Thus, the CRF should not be subjected to any price adjustment,” the ERC said.
The regulator denied the plea of the contracting parties for an automatic renewable clause for the ESA. The contract will be in force for 25 years from the actual date of delivery unless extended or renewed by the parties.
Dagupan Electric holds the congressional franchise to operate electric light and power services in the cities and municipalities of Dagupan, Calasiao, San Fabian, Sta. Barbara, San Jacinto, Manaoag, Barangay Cruz and Bolingit of San Carlos City, all in the province of Pangasinan.
The distribution utility currently sources around 83% of its power requirement from GNPower Mariveles Coal Plant Ltd. Co. and SN Aboitiz Power-Benguet, Inc. for a total of 40 MW.
Dagupan Electric projects power demand for this year to reach 68.673 MW as it expects demand to grow an average of 4% per year between 2016 and 2024, when it forecast demand to hit 86.893 MW.
SunAsia estimated the project to cost P816.47 million, or P81.65 million per megawatt. The bulk of the cost is allocated for the engineering, procurement and construction (EPC) contract at P611 million. The company identified the EPC contractor of the solar farm as Juwi Renewable Energies Private Ltd. — Victor V. Saulon