A tale of two hydroelectric plants

19 Apr 2006

Buoyed by improvements in operating efficiencies and prospects of growing demand for electricity in their areas, the new owners of two small hydroelectric facilities turned over by the Power Sector Assets and Liabilities Management Corporation (PSALM) in 2005 are now embarking on capacity expansion projects that will at least double their respective installed capacities.

Sta. Clara International Corporation, which bought the 1.2-megawatt (MW) Loboc Hydroelectric Power Plant in Bohol, plans to construct downstream of Loboc River two additional generators - one 1.2 MW and the other 0.5 MW - to optimize the use of the abundant water available.

Meanwhile, Sorsogon Electric Cooperative II (Soreco II), which purchased the 0.4-MW Cawayan Hydroelectric Power Plant in Sorsogon City, will pursue the Lower Cawayan Hydro Development Project (CHEP II), which includes a 2.4-MW new generating plant.


Sta. Clara President Nicandro G. Linao reports that Loboc's plant capacity factor (PCF) had improved from 77% to more than 90% since the facility was turned over by PSALM last year. As a result, electricity production has increased by over 10% from a little over eight million kilowatt hours (kWh) to about 9.5 million kWh.

"We believe Loboc HEP is an audacious choice because its capacity factor is high and more important, its water resource is abundant, making expansion possible," says Linao. "Although the plant is relatively small and old, we believe we can prolong its operating life by continuously improving its system and technologies, developing and empowering our employees, and consistently conducting preventive maintenance." Loboc has been operating since 1957.

Loboc HEP manager Dominador Borje discloses that they have started doing the comprehensive feasibility study on engineering and economic viability of the proposed expansion. Even at lower plant factors ranging from 60% to 80%, these additional generating capacities could be viable, he says.

The plant was turned over by PSALM to Sta. Clara in June 2005. Sta. Clara paid the $1.42-million price tag it submitted during a public bidding held in November 2004.

Sta. Clara believes that its acquisition of the Loboc HEP is a timely and relevant response to the growing industrial development in and tourism potential of Bohol, the Philippines's 10th largest island located at the center of the archipelago. All the villages of Bohol have access to electric service provided by three electric cooperatives - Bohol I, II and III.

Panglao Island, which is connected to Tagbilaran City by two bridges, is noted for its white beaches that are comparable to the more famous Boracay, while Balicasag Island is described as one of the country's best dive spots. An international airport is now being planned for Panglao where tourist resorts are enjoying brisk business.

Aside from white beaches, Bohol offers unique sights, among them the Chocolate Hills of Carmen, a string of historic churches, including Baclayon, one of the country's oldest, and the tiny and shy tarsiers which tourists can watch while waiting for their Loboc River ride, another popular tourist activity. With a very environmentally conscious population and leadership, Bohol boasts a reforestation showcase in between Loboc and Carmen.

The purchase of Loboc is the first venture of Sta. Clara in the power generation business. The company is engaged primarily in equipment trading and general construction. Committed to achieve the highest level of customer satisfaction, Sta. Clara pledges to promote social responsibility by providing quality service with due care for the environment and society, Linao says.

Banking on the experience and confidence it is gaining from operating a hydroelectric power plant, Sta. Clara is now preparing to join the bidding for other plants of the National Power Corporation, particularly the hydro facilities.


Even before the Electric Power Industry Reform Act was enacted in 2001, Soreco II had been operating Cawayan under a lease contract with National Power. The arrangement helped improve Soreco's finances.

Because of the strategic value of the plant to the cooperative's operation, it was only natural that it would be among the most aggressive bidders when Cawayan was placed on the auction block in September 2004.

The proposed CHEP II project offers the possibility of expanding Cawayan's existing 0.4-MW capacity by more than five times. The two-phase expansion project involves developing the tailrace and constructing a dam downstream.

"Cawayan's expansion program is a manifestation of our earnest response to heed the call of the government's power development program and avoid the power shortage projected to hit the Luzon grid in 2007," says Jose Gerald Y. Cubias, Soreco II general manager. It will also help Soreco II provide better quality of service and at the same time, render itself more viable. The electricity produced by Cawayan is fed directly to Soreco's 13.8-kilovolt primary line.

"We consider the plant as a very valuable asset to be acquired," says Cubias. During the five years that Soreco was operating the plant, the cooperative posted a financial turnaround.

To prolong the operating life of Cawayan, Soreco II is allocating a substantial amount of time and resources to maintain its penstock, which leads the water into a chamber housing the turbine. The water is held at a higher level than the turbine, enabling it to fall with enough force to strike the turbine's blades and cause them to spin and produce electricity. The water returns to the river by passing through a draft tube under the turbine and into the tailrace.

"We are establishing specific check-up points, aside from following the preventive maintenance schedule set by PSALM," Cubias says.

The cooperative is also regularly conducting research, networking with other hydro plants operators and technical people, and instituting hands-on training for its plant operators to ensure the operating efficiency of the plant.

Serviced by two electric cooperatives Soreco I and II, Sorsogon is fully energized. The entire province is steadily gaining the reputation of being a one big eco-tour package which includes the popular whale shark, or butanding. The package also offers interaction activity off the waters of Donsol, Pilar, Castilla, Magallanes, and Bacon District of Sorsogon City. Visitors can opt to commune with nature at the Mt. Bulusan Natural Park and its mystical Bulusan Mountain Lake Resort. The province also offers dive sites and marine sanctuaries, mysterious caves with interesting folk legends, hot springs and healing mineral water spas, picturesque little islands within Sorsogon Bay, old churches, ancient houses, monuments, and historic ruins to explore.

Cubias discloses that Soreco II has mapped out a sustainable development program to continuously improve the existing watershed facility and protect the power plant's and community's environment. The program includes annual tree planting to be participated in by Soreco II employees and community members.

"We also plan to conduct medical missions. We constantly keep in touch with community members to help us devise ways to uplift their standard of living," he says.

Based on its cash flow projects, Soreco II would be able to recover in five years the money it invested to acquire Cawayan. Cubias is optimistic that the capital recovery period could be shorter if the plant would be able to sustain its present level of production capacity.

"We have long realized that the private sector, because of greater flexibilities in the various areas of operations, is in a better position to initiate systems improvement programs," says Froilan Tampinco, PSALM vice president for asset management and electricity trading. "The improved performance of the plants not only assures the operator of additional revenues but also of

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