06 July 2011

Subic taps San Miguel for electricity requirements

THE Subic Bay Freeport Zone has tapped San Miguel Corp. (SMC) for its electricity requirements.

Under the agreement inked by the Freeport’s distributor, Subic Enerzone Corp. (SEZ), SM Energy Corp. (SMEC) will supply the utility’s electricity needs for six months.

SEZ, in particular, will source over 16 to 17 megawatts from April to September 2011 from SMEC at a flat rate of P3.89 per kilowatt-hour subject to fuel and foreign currency exchange adjustments.

The Energy Regulatory Commission already approved the two parties’ agreement in a provisional decision released last month subject to some conditions.

These are the determination of the final generation rate to be determined by the ERC; and the refund to consumers in case the initial rate agreed upon by SEZ and SMEC are higher than what the regulator comes out with.

Prior to the supply deal, the Freeport sourced its electricity from state-owned National Power Corp.

Most of the latter’s generating plants in Luzon, however, have been privatized under the government’s power sector reform and restructuring program.

Among those that acquired Napocor’s plants from the state auction block was SMEC, which spearheaded SMC’s diversification to the power generation business.

The assets acquired by SMEC from Napocor include the 620-megawatt Limay combined cycle power plant, and the administration for the contract for energy output of the 1,000-megawatt Sual coal-fired power plant, 345-megawatt San Roque multi-purpose hydro plant and the 1,294-megawatt Ilijan natural gas power plant.

SMC shares rose to P123 apiece on Tuesday from P119 on Monday. (Euan Paulo C. Añonuevo, Manila Times)