NewsWhore
01-03-2007, 05:10 PM
Speaking last Thursday, CDEEE administrator Radhames Segura announced the undoing of the 297-megawatt combined-cycle, oil-fired electric generating Cogentrix facility deal that was signed when he was in the same position with the CDE during Leonel Fernandez's first presidential term (1996-2000). Basic Energy, which operates Punta Cana-Macao and Bayahibe power plants, has agreed to convert the plant to natural gas, lowering its operation costs. The Dominican government will pick up the tab for the re-conversion, estimated at US$25 million, according to Segura himself.
The Cogentrix plant began commercial operations in 2001, but was shut down shortly after because its closure was less costly for the government than its operation. The nightmarish Cogentrix contract was signed by then and present Technical Minister of the Presidency Temistocles Montas. According to the terms of the contract, Cogentrix obliged the government to purchase power from the plant at a cost much higher than for what it could be sold to the distribution companies. Under the long-term Power Purchase Agreement with the San Pedro facility, the CDE was obliged to purchase its output for $0.09kWh, while it was bound to resell it into the wholesale market where spot prices stood at US$0.07/kWh. The deal produced an US$8 million loss when in operation, compared to US$4 million in losses with the plant shut down.
The government had signed the 20-year PPA on September 1998, and payment of obligations of the CDE under the PPA were guaranteed by the Dominican government and ratified by the Dominican Congress in May 1999.
The government has been seeking to renegotiate with the company since 2002 and eventually chose to keep the plant closed. The plant was funded by the Inter-American Development Bank, KFW of Germany and an investment from the Commonwealth Development Corporation, a UK government-owned fund.
Press reports have noted that it will cost an estimated US$16 million to build a gas line from the AES Andres natural gas terminal in Andres, Boca Chica to San Pedro de Macoris, in addition to the conversion cost of the plant in order for it to run on natural gas.
More... (http://www.dr1.com/index.html#7)
The Cogentrix plant began commercial operations in 2001, but was shut down shortly after because its closure was less costly for the government than its operation. The nightmarish Cogentrix contract was signed by then and present Technical Minister of the Presidency Temistocles Montas. According to the terms of the contract, Cogentrix obliged the government to purchase power from the plant at a cost much higher than for what it could be sold to the distribution companies. Under the long-term Power Purchase Agreement with the San Pedro facility, the CDE was obliged to purchase its output for $0.09kWh, while it was bound to resell it into the wholesale market where spot prices stood at US$0.07/kWh. The deal produced an US$8 million loss when in operation, compared to US$4 million in losses with the plant shut down.
The government had signed the 20-year PPA on September 1998, and payment of obligations of the CDE under the PPA were guaranteed by the Dominican government and ratified by the Dominican Congress in May 1999.
The government has been seeking to renegotiate with the company since 2002 and eventually chose to keep the plant closed. The plant was funded by the Inter-American Development Bank, KFW of Germany and an investment from the Commonwealth Development Corporation, a UK government-owned fund.
Press reports have noted that it will cost an estimated US$16 million to build a gas line from the AES Andres natural gas terminal in Andres, Boca Chica to San Pedro de Macoris, in addition to the conversion cost of the plant in order for it to run on natural gas.
More... (http://www.dr1.com/index.html#7)