MANILA, Philippines - The power generation unit of the Metrobank Group has entered into a long-term supply agreement with the Panay Electric Cooperative (PECO).

Panay Energy Development Corp. (PEDC) will supply PECO some 65 megawatts of power from its 164-MW coal plant project under a 25-year contract.

The 2 are seeking approval of the Energy Regulatory Commission (ERC).

PEDC said the supply contract would address power shortage in PECO's franchise area, and may also reduce power rates by P1.48 per kilowatt-hour.

PECO is having difficulty sourcing its power needs because its franchise area is located at the tail end of the Visayas grid's supply chain. It is also relying on expensive diesel-fired power.

"The expected additional capacity from PEDC even as early as the testing and commissioning and pre-commercial operations will help alleviate this shortage," they said in their petition with the ERC.

PEDC's coal facility is expected to go on stream by early next year or in March 2011.

PEDC is a unit of Global Business Power Corp., a consortium of the Metrobank Group, Aboitiz Power Corp., Vivant Energy Corp., and Formosa Heavy Industries Corp. of Taiwan.