Free Energy

The Korea Electric Co. (Kepco), the contractor for the 1,200-megawatt Ilijan natural gas power plant, had agreed in principle to pay the government at total of $38.4 million in liquidated damages for the delay in the commercial operation of the $800-million gas-fired facility.

The penalty has a form of “free energy” till the period of full offset of the liquidated damages.

The “free energy” policy was to start by the January this year but was delayed due to some technical problems which involved some gas turbines of the power facility, the commercial operations was moved to June 2002.

The Ilijan project is one of the downstream power plants that would be fueled by the Malampaya natural gas that was sold to Santa Rita and San Lorenzo both owned by the Lopez group.

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