SMC, 13 Luzon co-ops sign power supply deal
SMC Global Power Holdings Corp., the power generation unit of San Miguel Corp., signed an agreement this week with the Central Luzon Electric Cooperative Association to supply 300 megawatts of power.
SMC Global chairman Ramon Ang told reporters Friday the company offered the Central Luzon electric cooperatives a rate of P3.20 per kilowatt-hour for 20 years.
“We are selling it to them [electric coops] at P3.20 per kWh,” Ang said, adding the Central Luzon electric coops earlier bought power at a rate of P6 to P8 per kWh.
The association is composed of 13 cooperatives from Tarlac, Nueva Ecija, Pampanga, Zambales and Aurora provinces.
Ang said the agreement would bring affordable power to Central Luzon customers.
SMC Global will supply power to the electric cooperatives starting 2019 from the company’s Limay clean coal-fired power plant in Bataan.
“This will be the benchmark from now on,” Ang said, noting that other power generators would now compete with the lower rate offered by SMC Global.
Ang said SMC Global would still register profits despite the P3.20 per kWh rate because of the modern plant and production efficiency from the circulating fluidized bed coal technology.
An initial output of 150 MW from the Limay plant is set to join the Luzon grid next year year while the next 300-MW production would be ready by 2017.
San Miguel has been expanding its power generation capacity in the Visayas, with plans to put up a 300-MW plant in Panay and another 300-MW coal station in Cebu.
The coal-fired power plant in Panay is expected to cost $600 million.
Ang earlier said the new power plant would reduce the cost of electricity in Panay, which is suffering from high power rates of P6 to P8 per kilowatt-hour.
“We want to put up a power plant in Panay because we want to supply electricity in Iloilo because power prices are high there,” Ang said. Panay island consists of the provinces of Aklan, Antique, Capiz and Iloilo.
He said SMC Global Power could put up the 300-MW circulating fluidized bed or clean coal facility in two and half to three years, at a cost of $2 million per megawatt.
“Can you imagine if we can sell power at P3.20 or P3.30 per kWh,” Ang said. He said power from Panay could be exported to Cebu and make cheaper power available to Visayas consumers.
Data from the Energy Department showed that power demand in the Visayas would increase 7 percent in 2015 and 8 percent, annually from 2016 to 2020.
Ang said SMC Global Power would also put up a 300-MW power plant in Cebu.
He said Panay consumers would enjoy cheaper rates as the Central Luzon electric cooperatives.
“With this, we can sell electricity to many clients and consumers will be experiencing a drop in electricity rates,” he said.
San Miguel is now the country’s largest power company with its portfolio of independent power producer administrator contracts with Power Sector Assets and Liabilities Management Corp.
It also majority of the 218-MW Angat hydro electric power plant in Bulacan and manages the concession of the Albay Electric Cooperative.