News

EDC’s Bacon-Manito expansion project endorsed

Alexander Richter 7 Jul 2009

The local government has endorsed the about P10-billion (US$ 208 million) Bacon-Manito geothermal expansion project of the Lopez-owned Energy Development Corp. (EDC) adding 90 MW to already running 150 MW.

Reported locally, “The city government has endorsed the about P10-billion (US$ 208 million) Bacon-Manito geothermal expansion project of the Lopez-owned Energy Development Corp. (EDC).

The 10-man city legislative council, during last Friday’s special session, voted 8-2 in favor of the project located at Mts. Rangas and Tanawon, a mountainous terrain northwest of this city.

The endorsement was a requirement imposed on EDC by the Department on Environment and Natural Resources (DENR) for the issuance of an Environmental Compliance Certificate (ECC) to the expansion projects.

Vice-mayor Edmundo Atutubo, the council’s presiding officer, said the EDC management pledged P10 million to the city government in reparation assistance for at least 10 barangays down the project site that sustained heavy damages from floods and landslides at the height of typhoon Dante last May.

Villagers have attributed the disaster to the clearing and construction works of the EDC at the Rangas-Tanawon project sites.

The commitment of cash assistance, however, was made without admitting responsibility over the destruction being blamed by villagers on the Lopez-owned energy firm’s ongoing expansion projects within the vast geothermal reservation area.

The Rangas-Tanawon works are expansions being undertaken by the EDC to generate 90 megawatts (MW) of geothermal energy in addition to the 150-MW in installed capacity of the existing facilities sitting within the 25,000-hectare forest reservation.

Rangas had a potential output of 40 megawatts while Tanawon is expected to yield 50-megawatts, according to Liberato Virata, Bacon Geothermal Production Field (BGPF)resident manager.

The works on the project involve the drilling of nine geothermal wells, each producing 10 megawatts that would serve as an additional supply to the Luzon Power Grid of the National Power Corp. (Napocor), Virata said.

EDC is an erstwhile government-owned geothermal energy giant that was privatized and acquired in late 2007 for P58.5 billion by First Gen Corp., a subsidiary of the Lopez Group of Companies.

The expansions, Virata said, were in anticipation of the deterioration of the existing plants whose life span is only 25 years. Those old facilities were put up in 1987.

The Rangas-Tanawon projects would be completed in four years and, by that time, power sources of the NPC, which produced about 2,000 MW throughout the country, will retire and the EDC, being the largest geothermal-energy producer in the country, will be taking an active role in offsetting that losses, he said.

The BGPF expansion here involves two geothermal-steam production and power plants whose cost that was conceptualized by the Philippine National Oil Company (PNOC) several years ago has been initially placed at P6.8 billion each, a figure arrived at when the cost of gasoline was still at P35 per liter.

The amount is practically higher today, perhaps up to P10 billion as the current prices of petroleum products have gone up by about 40 percent.

EDC, now a P94.7-billion corporation under private ownership, would raise the money for these projects from internally generated funding but when more funds are required, the International Finance Corp. of the World Bank that has expressed intention to extent financing would be tapped, a recent company statement said.

We are convinced that this project will certainly improve the lives of the Sorsogueños, that is why we are optimistic in pursuing this kind of developmental effort,? Atutubo said as he explained the city council’s endorsement.

The putting up of the Rangas-Tanawon Geothermal Project promises sufficient power supply that is clean, renewable and sustainable, the vice-mayor added as he assured several sectors opposed to it that the city council would promptly recall the endorsement once the project proved to be destructive to the environment and hazardous to residents in host communities.

Source: Trading Markets