San Miguel to exercise Petron option this year

DIVERSIFYING food and beverage giant San Miguel Corp. is looking at pushing through this year with its plan to take a majority stake in Petron Corp.
"I think we might exercise the option this year," Ramon S. Ang, San Miguel chairman and president, told reporters yesterday.

San Miguel in December 2008 signed an option agreement with Petron’s owner, UK investment firm Ashmore Group, for a 50.1% stake in the refiner via the purchase of Ashmore unit SEA Refinery Corp. The option, which cost San Miguel $10 million, expires in December this year.

Exercising the option, Mr. Ang said, would be followed by a tender offer.

Ashmore currently owns 91% of Petron but last year already allowed San Miguel to join the refiner’s board.

Ashmore first bought into Petron in March 2008 by taking Saudi Aramco’s 40% stake for $550 million. The investment firm later that year raised its interest to 51% via a tender offer, then capped the year by purchasing the government’s 40% stake for P25.7 billion. At the time of the government stake sale Ashmore said it could turn around and resell to another party.

Mr. Ang’s statement sent Petron share prices to as high as P6.20 yesterday. The firm closed the day at P5.60

Source: Businessworld Online

French oil giant to invest P400 million for Cebu stations

CEBU, Philippines - French oil giant, Total (Philippines) Corporation (TPC) announced its P400 million investment plan for Cebu in the next three years.
This plan includes the installation of five more stations in Metro Cebu this year, which will incur an investment of P120 million.
In an interview with TPC president and managing director Ernst Wanten, he said that Cebu’s vibrant economy presents a growth opportunity for TPC.
Since its entry to the Philippines in 1998, Total has already installed 133 stations mostly in Luzon. This year, the company has decided to explore the Southern Philippine market, through a stronger presence in Cebu.
As part of its expansion program, the company opened a fuel depot in the province, which has a capacity of two million liters. It also currently upgraded its waterborne fleet with the acquisition of MT Camille, a 3,651 deadweight ton double-hulled vessel classified by the Korean Register Shipping as accredited by the International Association of Classification Societies (IACS). The depot will serve both retail and wholesale consumers.
Total’s strong entry in Cebu will not only provide wider options for consumers to get their fuel requirements, but it also offers business opportunity for entrepreneurs who may want to partner with the Total.
The company offers two packages for entrepreneurs for partnership these are via Company-Owned-Dealer-Operation (CODO) and Dealer-Owned-Dealer-Operated (DODO) options.
Of the total 133 gasoline stations installed by Total in the Philippines, 97 of which are DODO, and 36 are CODO.
In Cebu, Wanten said the company will build the infrastructure, which means the physical gasoline stations, and partnership will depend on the negotiations of interested entrepreneurs.
The first Total station in Cebu is located along Plaridel Street in Mandaue City. It has four pump islands and also has a Bonjour convenience store and Café that offer a wide selection of quality snacks and sundries. It is run by a staff of a 25 personnel.
“Our forefront service crew and Bonjour staff have been trained on the Total brand of customer service, which is what differentiates us from our competitors,” he said.
The Total big boss was here in Cebu to attend the Petro/World Forum held last March 9 to 12 at the Shangri-La Mactan Resort and Spa in Mactan Island.
In the next three years, the company plans to build at least 20 Total gasoline stations around the Cebu Metropolis.
“Cebuanos are different clientele. They are interesting,” Wanten said describing Cebuano customers as more demanding and critical. He said this is what makes it challenging for Total to establish its brand here.
With the quality and competitive products and prices offered by the company, Wanten is confident that Total will be able to hit the taste of the “Cebuano market”.
Total is the fifth largest publicly-traded integrated oil and gas company in the world. It reported sales of 179,976 billion Euro in 2008.

Source: The Freeman Cebu

Metro Cebu has enough water supply for its 2-M users till June–MCWD

THE water distribution utility serving Metro Cebu assured its customers that there is enough water for its 2 million residents during the expected long dry spell and the supply will last until the scheduled rainy season in June.

Metropolitan Cebu Water District (MCWD) production and distribution chief Genaro Mejor said there is no need for water rationing in their franchise area as of yet.  However, he explained there will be lesser delivery hours and lower pressure in some districts as the dry spell takes its effect on the supply.

“We have anticipated the problem and, thankfully, we were able to augment the supply just before the dry spell,” Mejor said.

But he added that instead of a daily average of 22.5 hours of water for its franchise areas, they estimate the number will go down to 21 hours per day as the water supply needs to be distributed to more customers.

The Buhisan Dam in Cebu City already has signs of drying up, but Mejor said the facility, built in the early 1900s, supplies just a small portion of the water supply of the metropolis. Most of the supply of MCWD is still taken from underground wells.

The MCWD’s biggest water well field in Jaclupan in Talisay City cut production by more than half from an average of 45,000 cubic meters a day to just 18,000 cubic meters in March. MCWD was able to open more wells and commissioned several private bulk-water suppliers to augment the supply.

Early this year MCWD added more than 4,500 cubic meters of supply from several wells in the south district of the city and bulk-water suppliers with injection areas in the north.

Mejor said more wells will be opened in the summer, while existing bulk-water suppliers said they can increase their volume by up to 25 percent.

But while the hot summer months will not pose problems for existing MCWD consumers, the water district itself admits they are facing bigger long-term problems. The utility admits to servicing only 55 percent of its service area either because of shortage of supply or lack of infrastructure to bring water to more people.

MCWD serves more than 130,000 customers in Metro Cebu and produces some 160,000 cubic meters of water daily, but this still falls short to fulfill the pent-up demand—potential customers who have pending applications for water lines, but could not be served.

“Our priority is to provide the best service to our existing customers,” Genaro said.

With Cebu not having enough big bodies of inland water like lakes and rivers, most of Metro Cebu’s water is sourced from underground wells. Pollution and overextraction, however, forced MCWD to close some of the wells as contaminants and sea water have found their way into the water sources.

MCWD recently signed a huge 20,000-cubic-meter bulk-water supply deal with the city of Danao in the north, which should secure the water supply in the city for the next several years.

Source: The Business Mirror

Total budgets P300M for expansion efforts

FRENCH-owned Total (Philippines) Corp. has earmarked for this year more than P300 million
to expand its domestic business and operation systems, Ernst Wanten, the company president
and managing director, said on Wednesday.
At the inauguration of Total’s double-hulled, double-bottom MT Camille vessel, Wanten said the
company is here to stay amid the challenges faced last year.
“We will continue to invest in the Philippines. This year alone we have budgeted over P300
million to fund our expansion program,” said the Total executive.
Wanten added that they are ready to pour in more resources to meet the energy requirements
of the country should the right opportunities come along.
Part of its expansion program, Total recently upgraded its waterborne fleet with the acquisition
of MT Camille, a 3,651-deadweight-ton vessel, which is under an exclusive time charter with
Sun Marine Corp. Total said MT Camille is classified by the Korean Register of Shipping to
have been accredited by the International Association of Classification Societies (IACS). IACS
assesses a ship’s structural strength and integrity, power generation, function and reliability of
systems, and other built features with regard to maintaining essential services on board.
Total said MT Camille will also go through the company’s strict vetting process to make sure the
vessel complies with regulatory standards.
Wanten said industrial safety and environmental stewardship are paramount to his company.
He added that in the case of marine transport, the acquisition of MT Camille starts with strict
selection criteria for chartered ships, followed by one of the most stringent vetting processes in
the oil industry.
“And while current shipping policies mandate a 20-year age limit to ships over 30,000 tons, we
have a modern fleet with an average age of five years,” Wanten said.;
MT Camille, which was built in 2004, can attain an average speed of 11.5 knots while carrying a
capacity of as much as 4.12 million liters of different white petroleum (gasoline, diesel and
ethanol) products.
It is also equipped with computerized cargo handling, advanced navigational, oil pollution
prevention and first-class satellite communication systems.
Dexter Flores, Total vice president for operations, said the new vessel will improve the
efficiency of the company’s waterborne distribution network by as much as 30 percent. “Its
bigger capacity, faster speed and higher discharging rate mean that we will be able to deliver
more products to more customers in a much shorter time,” he added.
In November Wanten said they have programmed to invest P120 million in Cebu to expand their
retail network. “The plan to expand in the Visayas, through Cebu, is an indication of [Total’s]
long-term commitment of doing business in the country amid some issues that continue to
hound the industry,” he said.
Wanten said they are planning to construct at least eight to 10 retail stations in Cebu. The first
station, he added, is expected to open shortly after Christmas or before the end of the year.
Wanten said they plan to build three more retail stations around Cebu in the next six months.
The Total executive said they will also put up a P10-million depot in the province. The facility will
have a capacity to store 2 million liters of various fuel products although this can be easily
expanded to accommodate more inventory.
He added that they will continue to expand their retail stations in Luzon. “In the past 12 years of
its operations in the country, we have already invested P4 billion in the country. The focal point
remains to be Luzon since there are still a lot of opportunities in the island-region,” Wanten said.
Total has been expanding its sales network by about 10 to 15 stations every year.

Source:  business Mirror

DOT's comprehensive infra program to provide water to tourist destinations

CEBU

, Philippines - As part of its efforts to provide efficient infrastructure support to top tourism destinations

in the country, the Department of Tourism is running a comprehensive infrastructure program in Boracay Island and other island destinations.
Boracay Island, the country’s pride and premier tourist destination, is undergoing a much-needed makeover, with the ongoing comprehensive infrastructure program that will provide ample supply of water to the area.
According to Tourism secretary Joseph Ace Durano the increased water efficiency will make a significant difference to the island, ensuring the availability of safe, potable water, and addressing the concern of water pollution, a concern in Boracay for sometime now.
The project is spearheaded by the Boracay Island Water Company, Inc. (BIWC), a joint venture company between Manila Water Company, Inc. and the Philippine Tourism Authority (PTA).
Established through a Memorandum of Agreement (MOA) signed in April last year, with Durano and Manila Water chairman Fernando Zobel de Ayala as key witnesses, the JV company will develop and operate the existing Boracay Water Supply and Sewerage System (BWSS) in Malay, Aklan.
Durano said the public-private sector partnership can be likened to a ‘grand slam win’ noting the four key factors such as “support infrastructure as an integral component of sustainable tourism development, the elimination of the water and sewerage constraint, benefiting both existing and new investments in the island, protection and conservation of the natural beauty of Boracay, and the creation of new jobs for locals.

Malapascua grant

In Cebu, the DOT gave P1.7 million to Barangay Logon, Malapascua Island in the northern Cebu to implement a solid waste management program and sustain tourist arrivals in the island.
Durano said the Malapascua Island grant is part of the DOT’s vision to make Malapascua a wold class eco-tourism destination.
“It is in eco-tourism products that the Philippines can be competitive. To revive the European market, we pushed scuba diving and look where it led us? Despite the crisis, French and German arrivals are still up,” said Durano.
Malapascua island in Daanbantayan town, one of the country’s top diving destinations, has three marine protected areas which attract scuba divers worldwide. These are Monad Shoal, Gato Island and Lapus Lapus.
“Preserving the island’s ecological wealth is our foremost priority. Promoting the sought-after destination to travelers also entails guaranteeing that the island can provide safe water to the local community and to tourists,” said DOT undersecretary for tourism planning and promotions Eduardo Jarque Jr.

Support

Meanwhile, helping the government improve the poor infrastructure state in the country, two water resource technology and distribution providers started their nationwide venture to solve water scarcity especially in the islands with huge tourism potentials.
Mactan Rock Industries, Inc. and Pilipinas Water Resources Inc (PWRI) jointly ventured into water supply operations in the outskirts municipalities of Visayas and Mindanao, following the success of “Barangayan” water projects in Cebu.
Mactan Rock and PWRI chairman Antonio P. Tompar said the two companies will spend another P70 million in this nationwide project, initially providing community water supply facilities in El Nido (Palawan), Cabadbaran in Agusan del Norte, and Aracelli in Northern Palawan.
“These areas have huge commercial and tourism potentials. We are providing them with water supply tapping their water-bank resources, to bring water directly to the households,” said Tompar.
Mactan Rock and PWRI are Cebu-based companies, which primarily aim to provide ample and affordable water supply to barangays or towns which water system facilities are not property implemented.

Source: The Freeman Cebu

CEMEX-Veco substation adds 10MW to CNP grid

CEBU, Philippines - With the worsening energy problems in the province, the additional supply of 10 Megawatts from the new CEMEX Philippines - Visayan Electric Company substation is a welcome development that would help to alleviate the power interruptions and brownouts in the area.
CEMEX Philippines, one of the biggest producers of cement in the country, together with officials of VECO, Naga Mayor Valdemar Chiong and Cebu Governor Gwendolyn Garcia yesterday had the ceremonial switching of the CEMEX-VECO Interconnection in APO Cement Plant, Tina-an Naga, Cebu.
CEMEX being initially known for its huge cement production which bought APO Cement in 2001, has its own power plant that produces energy for its operations however has decided to share 10 Megawatts of its total power to the whole province to help mitigate power interruptions that has been heavily experienced in the past year.
Just recently, the National Grid Corporation of the Philippines also announced a power shortage of 200 MW for the whole Visayas due to the shutdown of the power plant in Managdong, Leyte for a preventive maintenance.
Normandy Chan, Deputy Plant Director of Apo Cement said that their whole diesel fired power plant has the capacity of 66 MW wherein they use 40 MW for its internal operations.
This means excess power of more than 15 MW, which they are happy that they could contribute to the province that has been suffering from the lack of energy.
Chan said that they have started supplying 10 MW to VECO but has reached to 15 and may increase in the future.
Jaime Ruiz de Jaro, president of CEMEX Philippines and Asia said that even though they are largely on the production of top quality building materials, they are always looking for opportunities to help out.
“This is part of CEMEX’s continuing commitment to help sustain progress and development of Cebu,” de Jaro said.
According to recent data produced by the Cebu Energy Development Corporation, as of January 11 this year, Cebu has imported 254 MW from Leyte to give additional supply to the increasing demand of 549 MW wherein the dependable capacity is at 293 MW and should have a reserve of 128MW resulting to a deficit of 113MW for Cebu alone.
Atty. Darwin Mariano, Public Affairs Director of Cemex Philippines Asia explained that CEMEX would now be able to share the 10 MW of power to the Cebu-Negros-Panay Grid through the interconnection that would help VECO lessen their problem on cutting of power when plants bug down or needs to go down for maintenance.
Ethel Natera, the corporate communications officer of VECO said that the 10 MW would definitely be a big help so that they would turn of the power in certain places when needed.
Natera explained that the 10 MW would not be supplied to one particular area or feeder, as they call it, but would be distributed where it is needed. She said that the extra energy could already be a big addition to the supply for the feeders which energy demand depends on the population in the area and the establishments located in the vicinity.
According to Natera, CEMEX would be supplying energy in the morning which is the peak hours for energy demand but in the evening where there is less energy needed, CEMEX would be the one who would be buying from them since it is the peak of their operations.
So far, Natera said that CEMX has bought around 12 MW from them.
Cebu Governor Gwendolyn Garcia showed the province’s appreciation for the extra energy provided by CEMEX saying that it is important to “address the urgent need to be addressed in order to sustain the phenomenal growth that Cebu has achieved.”
Garcia acknowledged the huge support of the CEMEX not only for the power supply but as well as in previous projects like road constructions and the building of classrooms in the provinces which was damaged by typhoons in which CEMEX donated bags of cement.
Erramon Aboitiz, Executive Vice President and Chief Operating Officer of Aboitiz Equity Ventures and Chairman of the Board of VECO said that they see this as a “win-win-win” situation since this not only help them and CEMEX but the general public as well.
Aboitiz said that this is a milestone for them which is a first in the history of VECO where the substation is owned by VECO that directly synchronizes with the generating plant that employs unique switching equipment on its feeders for easy load transfer to and from VECO and APO power plants. It also functions as both a distribution substation and a transmission substation.
Naga Mayor Chiong and Atty. Paterno Acabodello, the representative of first district representative Eduardo Gullas also graced the event as well as other members of the private and public sector. 

Source: The Freeman

Another round of power interruptions set to hit the Visayas

CEBU CITY -- A major geothermal power plant in Leyte was shut down on Saturday for preventive maintenance, compounding the generation deficiency caused by the lack of imported power from Luzon and the unavailability or derated capacities of some units in Cebu.
Power utilities in Cebu, Negros and Panay are bracing for a shortage of up to 200 megawatts (MW) during peak hours starting today, as the 120-megawatt Mahanagdong plant undergoes preventive maintenance for 10 days.

Impact

This means another week of rotating power interruptions of up to one hour during peak periods.

"The impact of the supply shortage will be felt starting Monday," said Belinda S. Canlas, National Grid Corp. of the Philippines (NGCP) corporate communication officer in the Visayas, in an advisory sent by text last Saturday.

"The shortage will be felt Visayas-wide, as this will be equitably distributed among the major islands and cities," Ms. Canlas explained.

The shutdown of the Mahanagdong facility and some plants in Cebu contradicted an assurance made just last December by an NGCP official that no generating plant was to undergo preventive maintenance until next month.

"They were trying to delay the preventive maintenance shutdown but it was no longer possible," Ms. Canlas explained in a telephone interview.

She declined to identify the other power plants that were unavailable or have de-rated capacities, but sources said the 50-MW Cebu Thermal Power Plant 1 run by SPC Power Corp. in Naga is out again.

Bearing the brunt

The shutdown of the Mahanagdong plant on Saturday caused a 97-MW shortage in the Visayas, as reported on the NGCP Web site.

The Visayas region, including Bohol and Leyte, had a peak load of 1071 MW that day, but available capacity reached only 975 MW on that day.

The NGCP’s power outlook yesterday showed a shortage of 82 MW in the Visayas, thin reserves of 73 MW in Mindanao and 1087-MW reserves in Luzon.

Metro Cebu and neighboring towns, which require about 600 MW during peak hours, are expected to bear the brunt of the shortage in the region.

The Visayan Electric Co., Inc. (VECO), which serves over 300,000 power users in Cebu, is usually asked to de-load two-thirds of the deficiency, explained VECO corporate communications manager Ethel T. Natera.

For a 200-MW shortage, Ms. Natera said VECO expects to be asked to drop roughly 65 MW.

So far, she said VECO has been asked to de-load 40-50MW.

No respite

Metro Cebu has had no respite from rotating one-hour power interruptions, the latest of which occurred when the 50-MW power that the Luzon grid sends to augment the supply in the Cebu-Negros-Panay grid was cut off on Jan. 19 as Luzon itself ran out of reserves then.

The Malitbog power plant, which also supplies Luzon and Cebu-Negros-Panay grids, had also been shut down then for maintenance.

VECO, however, is getting help from its customers that de-load from the system during a shortage under the interruptible load program.

As of last week, Ms. Natera said the program has shaved 21.4 MW from VECO’s system and minimized the areas affected by power interruptions during peak hours -- from 10-12 a.m., 1-3 p.m. to 5:30-8 p.m.

"More customers, including the small ones with less than 1-MW requirement, have joined the program. We are prepared to cope with the shortage," she said.

Conservation boost

VECO has also employed demand-side management to lessen the impact of the shortage by distributing 15-watt compact fluorescent light (CFL) bulbs to its customers.

As of the first week of January, Ms. Natera said they have distributed 60,000 CFL bulbs.

The target is to give out 250,000 bulbs.

In Negros, NGCP-Negros head Zosimo Briones said load-shedding will still be expected, although the privatized generating units of the National Power Corp. (Napocor) in Negros will be available.

"The preparation is on the power plant side, [meanwhile] the NGCP facilities are [in place]," he said.

Green Core Geothermal, Inc. now operates the 192.5-megawatt Palinpinon geothermal power plants in Valencia, Negros Oriental.

Central Negros Electric Cooperative (CENECO) general manager Sulpicio Lagarde, Jr. said power supply to CENECO, which serves 140,000 consumers, should not be adversely affected as it sources electricity from the Palinpinon plants.

"We are not getting power from Leyte. Right now, all of our power supply are from Palinpinon. So, there will no effect to CENECO. The immediate effect is nil," he said.

Prepared

But he said CENECO will continue to issue its daily possible load shedding schedules during peak hours either because of the de-rated capacity of a Palinpinon geothermal power plant or generation deficiency, as instructed by NGCP.

In Iloilo, the management of Panay Electric Co. (PECo), the sole power distributor in Iloilo City, said it will ask Panay Power Corp. (PPC) to make up for any shortage in the next 10 days.

Randy S. Pastolero, PECo operations manager, said Iloilo City might be affected by the shortage as the city also draws 8-15 MW from the Cebu-Negros-Panay grid.

"We will ask PPC to compensate for the lost capacity from the grid," Mr. Pastolero said.

"If they can’t, we have to rotate outages [sic]."

Power interruptions ranging from 15 minutes to four hours hit Iloilo City on Saturday after PECo replaced rotting electric posts in Molo and Iloilo City proper districts.

Iloilo City, which has a peak demand of 82 MW, draws 75 MW from PPC, a subsidiary of Metrobank Group’s Global Business Power Corp. (GBPC).

Watching

Wilfred L. Billena, general manager of Iloilo Electric Cooperative (Ileco) 1, said they have yet to know the effects of the shutdown of the Leyte geothermal plant on their system.

He said their main source of power is Palinpinon geothermal power plant in Negros and PPC in Iloilo City.

"The effects of the preventive maintenance will depend on the NGCP’s load shedding schedule," Mr. Billena said.

The power supply situation in Cebu, Negros and Panay is expected to ease by the end of February or early March with the expected commissioning of the first 82-MW coal-fired plant that Cebu Energy Development Corp. has completed in Toledo City in Cebu.

Cebu Energy is building two more 82-MW units and plans to build a fourth in anticipation of another round of power shortage by 2013.

Global Business, which partly owns Cebu Energy, is also constructing a 164-MW coal-fired power plant in LaPaz, Iloilo City.

Source: The Businessworld Online

Power, water supply woes to deter BPO investments

CEBU, Philippines - The inevitable power and water shortage in Cebu, if not addressed immediately, may hamper the potential of Cebu to attract more Business Process Outsourcing (BPO) investments.

Cebu Educational Development Foundation for Information Technology (CEDFIT) official Gregg Gabison said utility providers for power and water in Cebu should immediately resolve this looming supply shortage, otherwise Cebu will miss a good chance of inviting big BPO investors.

While Cebu is positioning to become an “emerged” BPO destination in the world, basic necessities like water and power supply should be properly addressed, “sooner or later investors will find out this problem, and we are bound to lose them.”

According to Gabison, water supply shortage should be a major concern for authorities, if Cebu still wants to attract investors.

“The current water supply cannot even sustain the requirements of investors,” Gabison said.

More so, with the power supply, the frequent brownouts within the Metropolis due to lack of power is a major turn-off to investors.

On the other hand, the Visayas Electric Company (VECO) recently announced that it is building transmission line for Cebu Energy Development Corporation (CEDC).

“In pursuit of its mandate to deliver adequate, efficient and reliable service, VECO has prepared the following proposed major capital projects to be implemented within its franchise area for the year 2009: (a) 37 km Sangi-Naga 138 kV Tie Line and (b) 138 kV Switchyard & 100 MVA 138/69kV Substation,” a VECO statement said.

The 37-km Sangi-Naga 138 kV Tie Line will be dedicated to the supply of power from the Cebu Energy Development Corporation (CEDC”) power plant in Toledo City, as contained in a Memorandum of Agreement signed on August 3, 2009 between VECO and CEDC.

Without this Tie Line, the existing transmission capacity will be insufficient to export all the generation borne out of the Toledo area. In support of the Sangi-Naga 138 kV Tie Line project, VECO will also purchase and install a138 kV Switchyard/ 1 x 100 MVA/69kV Substation

Having experienced numerous outages this year, VECO projects outages to continue and worsen in the months to come and well into 2010. To avail of the benefits of the Tie Line as soon as CEDC is ready to export power by 2010, construction of the said line must start immediately.

The projects will be financed through internally-generated funds of VECO. The implementation of the projects will not result in any increase in VECO’s rates to its customers.

Also, private bulk water provider Mactan Rock Industries Inc., (MRII) is currently negotiating a joint venture with the Metro Cebu Water District (MCWD) for a joint venture deal to provide at least 5000 cubic-meter water a day.

Source: The Freeman Cebu

Despite Assurance By Power Firm: Korean group warns Cebuanos on Kepco

CEBU, Philippines - Capitol must think twice and study further the environmental impact of a coal-fired power plant before allowing the Korean Electric Company (Kepco) operate in Cebu, Korean environmentalists warned yesterday.

Kepco, meanwhile, cried foul over being singled out over the issue of coal ash dumping in the controversial Balili lot in Tinaan, Naga and stressed that health problems experienced by Naga residents could never be related to them since their power plant is yet to operate.

“We could never be the source of these ashes,” Kepco said.

The Korean Federation for Environmental Movement (KFEM) reported that since 1990 after Kepco built its coal powered plant in Dangjin, South Korea, the town has never been the same as before – wetlands have become dry lands, water increased its temperature by one degree Celsius and gone are the days when they could breathe fresh air.

While Kepco has brought advantages in the rural community of Korea being able to bring electricity even to its remotest area, the company has allegedly caused more harm than good.

KFEM Executive Director Kim Byeong Bin said that Kepco is a Korean company and with this they feel it is their responsibility to warn Cebuanos about the possible effects that Kepco’s project might bring in the next two years when it starts operating.

The power plant that Kepco built in Dangjin has a capacity of 4,000 megawatts with eight engines generating power.

About 10 million tons of coal is imported every year for its operation.

As usual for any operating power plants, water is needed to lower the temperature of its generating machines.

For this, 200 tons of hot water per second is discharged to the open sea affecting and area of about 62.3 square kilometers.

In terms of gas emissions, KFEM reported that the plant is releasing 25,000 tons of sulfuric acid, 20,000 of nitric acid and 3,000 tons of dust per year to include the small amount of other substances like mercury.

Kepco Corporate Secretary and General Counsel Guillermo P. Dabbay, Jr. said these reports from a group in Korean environmentalists have no basis and no concrete research data.

In fact, Dabbay said, that if anyone can visit Dangjin, the plant is using a clean modern technology specially designed to reduce the environmental impacts of coal power operation.

Contrary to what the Korean group alleged about marine ecological system alteration, the sea water there abounds with marine creatures.

Kepco also denied strong community resistance because they made sure that they are implementing a system that strictly addresses environmental impacts.

Kepco said that their mission in building a power plant in Cebu is to fulfill their commitment to the country “to bring essential power in Cebu, Panay and Negros which have already been suffering intermittent blackouts.”

It is not influenced by any personal interest because their investment, if to be examined, is a total risk on their part since theirs is a merchant plant, therefore, like any other investor, they will be selling their power in Cebu without any assurance of a good profit.

Before starting the construction of the plant in Naga in 2007, they committed and firmly declared that they intend to follow all the provisions of the Environmental Compliance Certificate issued by the Department of Environment and Natural Resources Central Office.

Dabbay said that Kepco will definitely address all environment concerns of the community especially the health hazards they allegedly caused the residents. He assured the public that they will be diligent in following all the DENR mandates outlined in the ECC as based on the environmental hazard study they submitted.

“Violating of the environmental laws will be the last thing in our agenda,” he said.

He said they are just waiting for the result of the DENR analysis in the coal ashes found dumped in Naga. “We have first to confirm the reports, validate it, and in the event it is proven that there are relations to our operation, then we have to do something.”

He clarified that they can only start the actual dumping on 2011 when they start operating as provided in the Memorandum of Agreement they signed with the provincial government of Cebu.

“Actually, these issues have already resolved even during the times when we were still conducting public hearings and consultations with the members of the community in Naga. It is just unfortunate that we are being dragged in the issue of the controversial Balili lot,” Dabbay said.

Nevertheless, Dabbay said that they still believe that their deal with the province of Cebu will proceed. “Our only hope is that the Balili issue will end immediately.”

Source: The Freeman Cebu

CEBU, Philippines - To cushion the expected power supply shortage in Cebu this month, the Visayas Electric Company (VECO) and CEMEX Philippines recent

Cebu’s power sector industry players like VECO are expecting a shortage of 10 to 20-megawatts (MW) of power supply this month as independent power plants (IPP) undergo a temporary shutdown of their facilities to begin their scheduled maintenance.

VECO and CEMEX’s agreement will immediately be submitted to the Energy Regulatory Commission (ERC) for approval.

“Although power generation is not the core business of CEMEX, we offer to supply VECO with excess generation capacity in order to help address the power shortage in the province,” said CEMEX Philippines President Sergio Menendez.

Menendez credits CEMEX’s power surplus from the company’s efforts to making its plants more energy efficient.

CEMEX, which is a global building material firm, is the third largest cement manufacturing firm in the Philippines.

The additional 10-MW of power from CEMEX, will help in view of the tight power supply situation in the Cebu-Negros-Panay (CNP) grid.

“The agreement will help address the power shortfall experienced by VECO’s customers in the past weeks. This will ensure the continued growth of Cebu by making reliable and efficient electricity available to commercial, industrial and residential users at all times,” Lacson said.

Based on estimates, the CNP grid has an average of 90-MW power deficit daily during peak hours, VECOs contribution is abut 15-20 MW, Lacson said.

Reportedly, the grid is now at a 30-percent deficit and this level is expected to worsen come December.

Earlier, VECO’s mother company Aboitiz Power Corporation (AP) announced that it is working on importing power supply from Luzon to Cebu.

As soon as AP completes the legality processes with National Grid Corp. of the Philippines (NGCP), and Energy Regulatory Commission (ERC), it will soon implement the planned power importation.

Initially, the company is planning to import least 10 megawatts during off-peak hours through the existing submarine cables connecting Luzon to Leyte and Leyte to Cebu to its sister-company Balamban Enerzone, but it is also looking at augmenting power supply in Cebu in offering this to different power distribution companies in the province, especially VECO, which is also partly-owned by the Aboitizes.

Source: The Freeman Cebu

CEDC to use earth-friendly means to produce power

CEBU, Philippines - The Cebu Energy Development Corporation will be producing 246 megawatts in 2010 but as early as yesterday, CEDC president Jesus Alcordo assured environmentalists that the company will be using technology that would not harm the environment.

In a press conference, Alcordo said CEDC will be using state-of-the-art technology, which would defy the notion that coal ash is detrimental to the health of the people, as it emits dust and other toxic elements.

He said this notion “belongs to the old technology.”

“We as a company, in preserving the environment, we have no quarrel with the environmentalists. We are open and transparent as far as environmental performance is concerned,” Alcordo said.

He said CEDC is looking at several options in handling coal ash, among which is to supply the same to cement plants, as calcium carbonate present in coal ash is one of the additives for cement and to supply it to hollow block factories.

Alcordo said CEDC has partnered with the Toledo Power Company for a livelihood legacy program called “Kabilin” for a “sustainable and reliable power plant operations.” Among the activities the program will undertake are tree planting, livelihood development, and biodiversity and aquifer preservation.

Yesterday, CEDC signed several Memoranda of Agreement with the Department of Environment and Natural Resources in which CEDC agreed to plant 180,000 trees in a 100 hectare land.

Likewise, Alcordo assured that power rates of CEDC will be more stable next year. He said that because loans with the bank are peso dominated, their power rates are more stable compared to other power projects.

Source: Cebu Daily News

10MW from Apo

CEMENT company Cemex Philippines will provide the Visayan Electric Co. (Veco) its excess power to minimize outages caused by insufficient supply.

Cemex’s Apo Cement Corp. will sell to Veco the 10 megawatts (MW) excess power generated by its diesel fuel plant in Naga, Cebu during peak hours.

Veco’s franchise area covers Metro Cebu towns and cities where demand for power reaches its peak around 6 to 9 p.m.

Cemex and Veco signed a one-year interim power supply agreement at the Cebu City Marriott Hotel yesterday. The agreement will be submitted to the Energy Regulatory Commission (ERC) for approval.

Veco corporate communications manager Ethel Natera said the generation charge that will be imposed Cemex/Apo Cement will be known after the ERC review and approval of the interim power supply agreement.

The power supply situation in Cebu has been described as “critical” as declining output of aging National Power Corp. plants can hardly cope with the growing demand. This situation has resulted in power interruptions during peak hours.

With a couple of power plants scheduled for preventive maintenance this month, Veco estimated a 10- to 20-MW shortage in Cebu.

The effect of the shortage has been mitigated by the Interruptible Load Program that Veco is implementing together with several industries and commercial
establishments that have their own power generation plants. The program, which was also initiated with the support of the Cebu Provincial Government, allows
participating industries and commercial establishments to deload from Veco’s system during shortages and run their own power generation units.

The ERC has granted Veco provisional authority to implement the program and to pay participating industries and establishments the costs they incur when running their own power generation units. Those that have signed up for the program include SM, Ayala and E-Mall shopping centers, Waterfront Cebu City Hotel and San Miguel Corp.
The payment that Veco makes to private firms under the Interruptible Load Program will be shouldered by the distribution utility’s customers.

“An additional supply of one megawatt is already a (big) help to us,” said Sebastian Lacson, former Veco vice president for administration and customer service group and now chief reputation officer of Aboitiz Equity Ventures.

Veco said that its agreement with Cemex will help address the power shortfall experienced by its customers in the past weeks.

“It has been estimated that the Cebu-Negros-Panay grid suffers from a total peak demand deficit of 155 MW, of which 20 to 30 are in Cebu alone... We are happy that the excess power we are able to generate from our operations here can be used to help alleviate the power shortage in the province,” said Cemex Philippines president Sergio Menendez.

Darwin Mariano, Cemex Philippines public affairs director for Asia, said the cement plant’s excess power is the result of the company’s energy efficiency measures. Apo Cement Corp.’s power plant has a capacity to generate 66 MW.

Mariano said, though, that Cemex’s core business is not power generation but providing quality cement to the market. NRC with.

Source: The Sunstar Daily Cebu

Aboitiz Power introduces "Cleanergy" brand

CEBU, Philippines - Cebuano power consumers may soon be able to buy electricity source from renewable energy plants, following the introduction of Aboitiz Power Corporation (AP) “Cleanergy” brand.

“Cleanergy concretizes the company’s promise of providing better solutions for a better future. It is an energy solution that will give AP power consumers an option to reduce their carbon footprint and attain a more sustainable lifestyle,” said Erramon Aboitiz AP President and Chief Executive Officer.

However, Aboitiz said that in order for AP to sell its “Cleanergy” to customers who are looking for renewable energy sources, the company will wait for the open access power supply system to be adopted in the Philippines.

In an open access regime, large power consumers can choose their power suppliers, unlike the present system, which restricts their choice to distributors operating in their respective areas.

Aboitiz said the main purpose of the re-marketing of AP is to widen public consciousness about climate change and its adverse impact on society.

“Once the Renewable Energy Bill becomes a law, it allows end-users to tell their distribution utilities that they want to buy power from renewable energy sources,” Aboitiz said.

The “Cleanergy” may be sourced from the company’s combined 1,000-megawatt renewable energy capacity under AP’s portfolio, he added.

“We like renewable energy. We think the future of the country’s power industry is into renewable energy sources,” Aboitiz said, but acknowledged the option of providing green power is something “not readily acceptable to consumers.”

“It is feasible but it will take time for consumers to appreciate ‘green power’. In the long run, what we want to see is consumers who are willing to pay a little more for ‘green power’ and we want to be ready when the demand comes and offer it to them at the least possible cost,” he said.

Energy sourced from expensive renewable power sources, will be offered as optional product for “environmentally-friendly” consumers. Aboitiz believes that with the growing concern of global warming issues, more and more customers are demanding for it.

Besides, once the Bill will be passed into Law, consumers that are using electricity products sourced from renewable sources will be exempted from the 10 percent value added tax.

In Cebu, due to unavailability of renewable power resources, Aboitiz said the company is trying its best to limit the adverse effect of coal-fired plant, which the company is building a 246-MW power plant in Toledo, in partnership with Global Power.

“We like renewable power, but there are times that they are not available,” Aboitiz said.

However, if the open access will be implemented, Cebuano power consumers, as well as the rest of the Visayas, will be able to buy “Cleanergy” product, through an importation of power from Luzon to Cebu, Aboitiz said.

Source: The Freeman Cebu

Management assures stable power supply

CEBU, Philippines - Majority of the members of the SPC Independent Union are in favor of the plan to stage a strike, as revealed by the results of the union’s strike voting yesterday.
But the top officials of Salcon Power Corporation and the National Power Corporation continue to assure the electricity consumers that there will be no power supply shortage in Cebu.
“Reliable supply of electricity is our mandate. The SPC Power Corp. and the National Power Corporation (NPC) are going the extra mile to ensure continued operations,” assured SPC Corporation president Dennis Villareal and National Power Corporation president Froilan A. Tampinco.
SPIU union president Gaudioso Iso said that during their strike voting yesterday, 91 of their 109 union members voted yes to strike, five voted no and one ballot was declared spoiled.
Iso said the results show that the workers are now ready to go on a strike. The results of the strike voting will be submitted to the National Conciliation and Mediation Board, where the management and the union will have another round of mediation on August 28.
After the submission of the strike vote, the union has still to wait for a seven-day cooling-off period before they will be allowed to go on strike.
“But there is a possibility that we will not pursue with the strike if we can have a win-win solution,” Iso said.
Villareal and Tampinco added that “we need to keep the five power plants inside the Naga complex up and running. This is our commitment to the people of Cebu and the Visayas.” They asked union officials to be reasonable and refrain from plunging the whole Visayas into darkness.
The personnel from the NPC will augment SPC employees who are expected to be true to their commitment to serve first and foremost along with members of the SPC supervisors’ union.
Meanwhile, Alfredo S. Ballesteros, Senior VP for administration and finance and chief of the management-negotiating panel, assured that the rights and welfare even of protesting employees shall be respected.
“While management laments the current stand of our rank and file union leadership in pushing for a strike to achieve their demands, we still consider them our employees who continue to enjoy rights and privileges as long as they do not violate the law,” he said.
Ballesteros added that the longer the rank-and-file union refuses to go back to the negotiating table for their demands, the shorter the period that members would enjoy the benefits that management is willing to grant considering that their contract with the NPC is only until March 2012.

Source: The Freeman Cebu