Catanduanes, Philippines Lower Dugui Mini Hydro Power Plant

Basic Features Isolated from the main Luzon Grid Power source is mainly diesel generating sets operated by the government. Available power supply is 11,000 kW. The existing Hydro Power Plant available capacity is 1,600 kw or about 15 %.

Trends and issues … Under EPIRA law, the Department of Energy issued a circular, in December 2003, “Enjoining All Distribution Utilities to supply adequate, affordable, quality and reliable electricity.” Then in January 26, 2004, another circular was issued, this time, opening to the private sector the generation of electricity in the 14 provinces considered as missionary areas. Catanduanes is one of the first wave provinces for power privatization

FICELCO is the lone distribution utility in the province. It is a cooperative owned by the electric consumers in the area who also directly elects its Board of Directors Power One Corporation, a private Filipino owned power producer, has an MOU with FICELCO to supply electric power on a competitive basis and take ove the generation functions from NPC-SPUG.

Trends and considerations… Power One Corporation acquired two Bunker C type generating sets rated at 2.5 Kw and now at the preparations stage. PO upon turnover by NPC-SPUG will lease a 3.6 MW bunker C generating set from NPC. This is already installed at Marinawa Plant but will still be rehabilitated to make it operational. Diesel price is sensitive to international demand and supply. Consumers cannot absorb power adjustments forever due to rising fuel costs. Tariff rates has an automatic rate adjustment mechanism for recovering incremental cost of fuel and foreign exchange adjustment. Power rates for the consumers become unpredictable.

Developments... MBA, in cooperation with Innovation Energie Developpement(IED), initiated a series of consultations, presentations, and dialogues with local government leaders of Catanduanes, FICELCO, and Power One Corporation. On October 27, 2004, an MOU was signed by the three parties to conduct a joint study of the Mini Hydro Power Plant Potential of Lower Dugui in Virac, Catanduanes under the EU-ASEAN Energy Facility sponsored IFRERA project.

POWER LOAD CHARACTERISTICS 21,872 MW-Hr sold in 2004 The peak load registered is 6.5 MW and the base load is 3.2 MW in percent residential in nature. With 75 % of all households connected to the system Commercial establishments constitute 18 percent Government buildings comprise the single biggest customer of FICELCO. It represents 12 percent of the total consumption. Street lighting constitutes 2 percent. No industrial customers exist in the island. In 2005, the trend in consumption shifts more to the commercial load because of mobile communication networks in the island. No demand exist yet for irrigation considering 70 % of the people depends on agriculture.

Existing Power Plants in Catanduanes

Load dispatching scenario The expected merit order of load dispatch 1. Balongbong Mini Hydro 2. Proposed Lower Dugui Mini Hydro 3. Bunker C Generators of Power One 4. Diesel generators of FICELCO

FEATURES OF THE PROPOSED LOWER DUGUI MHPP Power Rating kW Investment Cost PhP375 M or less Cost per Kw-H PhP2.14 per kW-hr Existing NPC tariff to FICELCO PhP4.13 NPC True Cost of Generation PhP

FINANCING POSSIBILITIES DBP window 3 Dedicated to RE Projects Landbank Loan with LGU Guarantee. Joint venture with Power One Corporation

WHY FICELCO WANTS HYDRO Expected lower tariff to customers Power from RE is exempt from 12% VAT Environment friendly More stable electricity rates Catanduanes geographic and climatic conditions is suitable for MHPP Interest and support of the LGU to develop RE instead of diesel/coal.