Alsons investing additional $200 million

For Sarangani power plant expansion

MAASIM, Sarangani — The power generation arm of the Alcantaraowned Alsons Consolidated Resources Inc. will invest additional $200 million for the second phase of the coal-fed power plant it will be constructing here.

That will be on top of the $280 million already announced by the Alsons power group for the project’s first phase which will have 100 megawatt capacity and is targeted on stream by mid-2014. The second phase will have the same capacity and will likely contribute to Mindanao grid’s supply by 2015.

“Our investment for phase 2 will be lower because we already gained economies of scale from the first phase … we already have the coal yard, jetty and other facilities. We are targeting construction of phase 2 six months after,” Alsons power group chief executive officer Tirso G. Santillan Jr. said.

At least 70 megawatts of the power plant’s capacity had already been committed to South Cotabato II Electric Cooperative (Socoteco II) via a 25-year power sales agreement (PSA).

Santillan noted that the offered rate to the electric cooperative-offtaker is at P5.95 per kilowatt hour (kWh). “It is still subject to approval by the ERC (Energy Regulatory Commission),” he emphasized.

Upon the plant’s commercial operation in 2014, it is expected that this will drive down the blended rate of Socoteco II by more than P1.00 per kilowatt hour (kWh) as it will replace part of the capacity being drawn now from a diesel-fired facility.

Socoteco II general manager Rudy Ocat noted that their demand will continuously grow in the next three years, hence, they contracted for 70 megawatts of the plant’s initial capacity.

According to Joseph Nocos, vice president for business development of the project’s corporate vehicle Sarangani Energy Corporation, the customers will be shielded from unwarranted cost impacts because of the procurement strategy they employed for the project, primarily for their coal supply contract with an Indonesian supplier