President Arroyo and Energy Secretary were at ceremonies in Leyte this week where CalEnergy turned over the 130 MW Upper Mahiao geothermal electric generating plant to PNOC-EDC upon the expiration of its ten year BOT (build-own-transfer) Agreement.
In their own words, from this article:
“PNOC-EDC gives this plant steam. Then, I get all of the electricity that is converted from the steam. Now, I pay CalEnergy the energy conversion fee—the fee for them converting my steam into energy. Our revenues would remain the same, it’s just that my cost would become lower,” [PNOC-EDC President] Aquino said.
Under the BOT scheme, Upper Mahiao sold 100 percent of its capacity to PNOC-EDC for resale to National Power Corp. and distribution to Cebu province via an underwater transmission cable.
“This is good news because we no longer have to pay for somebody else to operate this 130-megawatt plant,” Lotilla added.
Mrs. Arroyo lauded the turnover and said the PNOC-EDC’s takeover of the Leyte geothermal reservation will bring the country a step closer to energy independence.
Regarding the very last paragraph attributed to Arroyo: huh?
For the rest of it, that’s pretty much right, if not totally clear to the general public.
Lest the public forgets, the "conversion fee" was a way to get the plant built and financed – it includes capital recovery for CalEnergy’s construction costs. In a sense, this is somewhat like paying off your car – after ten years, the plant is paid for and the bank turns the title back over to you.
So, the car is paid for, we still have some operating and maintenance costs and have to buy gas, but it seems as if ratepayers are still paying as if we were still making payments to the bank too. Maybe I’m wrong.
I also note that PNOC-EDC is (once again) preparing to sell a big chuck of its shares to the private sector in September.
Pero yun nga, yung electricity price, yung electricity price!