US-based firm offers to build P75B power plant, tunnel in Cebu City

A COMPANY based in Oklahoma, United States has expressed interest in putting up a P75 billion power plant and tunnel where the lines of telecommunication companies and power lines could pass through in Cebu City.

The company, Cosmo Energy LLC, said it would construct these facilities at its own expense, and the Cebu City Government would not have to shell out its funds, said lawyer Gerardo Carillo, chairman of the Cebu City Disaster Risk Reduction and Management Council (CDRRMC).

According to Carillo, Cosmo Energy wants to sign a joint venture agreement (JVA) with the Cebu City Government, and it said that it will charge only P9 per kilowatt hour, the Cebu City Public Information Office (PIO) reported on its official website.

“I’m very glad that Cosmo offered 200-megawatt power. If they will operate, that will lower the cost of electricity. Veco (Visayan Electric Company) now is imposing (on) us around P14 per kilowatt (hour),” said Carillo on Wednesday, Feb. 16, 2022, in Panaghisgot, a forum organized by the Cebu City PIO.

Based on Cosmo Energy’s estimates, the project will cost up to $1.5 billion, or about P75 billion. This cost already includes the underground tunnel, power plant and cables.

Carillo hopes the JVA will be approved soon so Mayor Michael Rama’s plan of Cebu City having its own power plant will be realized.

During Environment Secretary Roy Cimatu’s visit to Cebu City last Jan. 14, Rama requested him for the construction of a power plant and underground power and telecommunication lines so the city could become more disaster-resilient.

Cimatu heads the Build Back Better Task Force, which the National Government formed to supervise the rehabilitation efforts in the aftermath of Typhoon Odette.

Power and telecommunication services were badly affected when Typhoon Odette (Rai) struck Cebu on Dec. 16, 2021, toppling power and telecommunication poles. Water and internet services, dependent on power distributed through aboveground poles, were also affected.

These services have not been fully restored two months after the storm.

“Our poles and wires should be underground like in any other advanced country. So if there is a strong wind that hits our city, the services would not stop -- power, utilities, water and others -- because they are placed underground,” Carillo said in a mix of Cebuano and English.

Cosmo Energy, according to its LinkedIn profile, is an Oklahoma-based “mineral and royalty interest acquisition company,” and it “holds a large footprint of non-operated working interests throughout the state. Our primary focus is on the purchases of high return assets and the strategic development of the assets over time.”

The company’s LinkedIn profile says it employs 11 to 50 employees, but it does not state the names of its owners and projects.

Last September, Visayan Electric said it gets its power supply from Cebu Energy Development Corp. (CEDC), Therma Visayas Inc. (TVI) and Green Core Geothermal Inc. (GCGI).

CEDC operates a 246 MW clean coal-fired power plant in Toledo City, Cebu, while Therma Visayas Inc. operates a 340 MW power plant in Barangay Bato, also in Toledo City. GCGI operates a 112.5 MW geothermal plant in Leyte and 192.5 MW geothermal plants in Negros Oriental.

Submitted to Council

Carillo told SunStar Cebu in a phone interview that the unsolicited proposal from Cosmo Energy LLC, including the draft JVA, had already been submitted to the City Council last Friday, Feb. 11, and this will be discussed by the committee on energy.

He said Mayor Michael Rama instructed him to submit the proposal to the Council, saying the latter wants the legislative branch to discuss the contents of the draft JVA.

Asked if Rama would be able to sign the JVA before his term ends on June 30, Carillo said: “It depends on how fast the Council can act.”

As the City will not spend a single peso on the proposed project, in return, Carillo said, Cosmo Energy can supply electricity to the National Grid Corp. of the Philippines and Visayan Electric.

Cosmo Energy would also pay the City rent.

In addition, the facilities built by Cosmo Energy in Cebu City will be turned over to the City Government after 20 years.

Rama wants the power plant to directly supply the residents, Carillo said.

The other plan is to let Cosmo Energy supply electricity to the city’s households, while letting Visayan Electric supply power to malls, commercial centers and industrial establishments.

Included in Cosmo Energy’s proposal is the construction of a solar farm in the seawaters off the South Road Properties, which Carillo said could be a tourist attraction.

The other proposal is the construction of a waste-to-energy facility somewhere in the city far from residential areas.

“They are very serious in their proposal,” Carillo said of the US-based company, which has offices in Hawaii and Japan. One of its business partners is a Cebuano.

Carillo said there were other proposals, including from Visayan Electric, which proposes to construct subterranean tunnels phase by phase.

Still other proposals required cash outlays from the City Government, Carillo said. / KAL, CTL

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First published by SunStar Cebu: https://www.sunstar.com.ph/article/1921215/cebu/local-news/us-based-firm-offers-to-build-p75b-power-plant-tunnel-in-cebu-city