TACLOBAN CITY — As consumers across Eastern Visayas continue to grapple with rising electricity rates, renewable energy firm First Gen Corporation has reiterated its readiness to provide additional geothermal power from its Leyte facility, saying it can help deliver more stable and affordable electricity once future power procurement rules allow its participation.
With electricity rates in all electric cooperatives in Eastern Visayas due to higher generation costs and volatility in the power market, First Gen said geothermal energy offers a long-term solution because it is a locally sourced baseload resource that is not affected by fluctuations in global fuel prices.
The company said it remains prepared to supply uncontracted capacity from the Tongonan Geothermal Power Plant in Leyte, operated by its renewable energy subsidiary, Energy Development Corporation (EDC), through future Competitive Selection Processes (CSP) or emergency power supply procurements.
However, First Gen said it was unable to participate in the 2024 Competitive Selection Process conducted by the Federation of Rural Electric Cooperatives in Region 8 (FRECOR-8) after revisions to the Terms of Reference (TOR), particularly the cap imposed on Operations and Maintenance (O&M) cost components, made the bidding commercially unviable for geothermal facilities.
The company explained that while the pricing mechanism may be appropriate for coal-fired power plants, geothermal plants operate under a different cost structure.
Unlike coal plants, geothermal facilities have no fuel costs but require continuous investments in maintaining steam fields and production wells to sustain reliable 24-hour electricity generation.
“Serving our home region has always been a priority for us,” said Teodulfo Troyo, head of the EDC Tongonan Geothermal Power Plant at the Leyte First Gen Renewables facility.
“While shifting parameters in the recent bidding frameworks unfortunately kept us from participating, we are fully prepared to offer our available power supply whenever future procurement terms accommodate the operational realities of existing renewable energy plants like ours,” Troyo added.
First Gen currently supplies electricity to Leyte II Electric Cooperative (Leyeco II) and Leyte III Electric Cooperative (Leyeco III) through Green Core Geothermal Inc., which owns the Tongonan Geothermal Power Plant in Leyte and the Palinpinon-1 Geothermal Power Plant in Negros Oriental.
According to the company, these power supply agreements have enabled consumers within the franchise areas of the two cooperatives to enjoy relatively stable and predictable electricity prices over the past 15 years.
Because geothermal energy is generated from an indigenous renewable resource, its cost is largely insulated from the price swings affecting imported coal and oil, which often drive increases in electricity rates.
First Gen said it hopes to extend these benefits to more households and businesses across Eastern Visayas by offering its available geothermal capacity through future long-term bidding or emergency procurement mechanisms.
“We believe that the best way forward is open cooperation,” Troyo said.
“We are ready to work with local energy stakeholders and electric cooperatives to find compliant solutions that will bring long-term, affordable, and clean energy to the consumers of Region 8,” he added.
Eastern Visayas has experienced periodic increases in electricity rates in recent years due to supply constraints, dependence on power sourced from outside the region, and fluctuations in fuel prices. Industry observers have long cited geothermal energy as one of the region’s key advantages because Leyte hosts one of the country’s largest geothermal fields, capable of providing reliable baseload power while reducing dependence on imported fossil fuels.
First Gen is the Philippines’ leading renewable energy provider, with more than 1,700 megawatts of generating capacity from geothermal, hydro, wind, and solar facilities nationwide. More than 1,300 MW of this capacity comes from geothermal plants operated by EDC, making the Philippines the world’s third-largest producer of geothermal energy.
(ROEL T. AMAZONA)
