Green Core Geothermal Inc. (GCGI), a unit of the Lopez-led geothermal energy firm Energy Development Corp. (EDC), has extended its supply contract with Capiz Electric Cooperative Inc. (Capelco) for 20 years to 2040.
GCGI operates the 112.5-MW Tongonan geothermal plant in Leyte and the 192.5-MW Palinpinon geothermal plants in Negros Oriental.
Capelco is one of the electric cooperatives in Panay, supplying power to 17 cities and municipalities in Capiz.
In a statement, EDC said GCGI and Capelco had signed amendments to their power supply agreement (PSA) extending the existing 10-year contract until December 2040 from the previous PSA to December 2020.
“We are delighted that CAPELCO and GCGI have mutually decided to move forward with the partnership. More than just being business partners, we now consider our relationship as having gone to the next level,” GCGI President Richard Tantoco said.
Besides the contract extension, GCGI and CAPELCO agreed on a new price based on re-pricing provisions and market-based price structure in their original PSA, which was signed in August 2010.
“Based on the amended PSA, GCGI reduced its price in 2015 by approximately P0.30 per kilowatt-hour (kWh). Capelco has saved for its member consumers P140 million annually in generation charges,” the company said.
Tantoco said the P0.30 per kWh price rate will “help Capelco minimize their risk from unpredictable foreign exchange rate fluctuations and volatile global fuel price movements. This is a major benefit for Capelco granted that, historically, coal price movements have swung wildly.”
“Capelco was very pleased with the results of the re-pricing endeavors with GCGI given that its benefits will be directly felt by our member consumers,” said Edgar Diaz, Capelco general manager.
Besides extension and price adjustment, GCGI will also increase its supply as provided in the amended contract from 12 megawatts (MW) to 15 MW of power for one year starting this month to September 2015, and up to 18 MW starting September next year until December 2040.