Sunday, November 28, 2010

Meralco looking at natural gas for planned power generation projects

Business World Online
Posted on 09:15 PM, November 28, 2010

THE POWER generation arm of distribution utility Manila Electric Co. (Meralco) is planning to tap natural gas for its power projects, Chief Operating Officer Oscar S. Reyes told reporters.
Mr. Reyes said the company’s subsidiary, Meralco Power Gen Corp., is considering using more conventional power sources.

“In the earlier stages, we may prefer sort of conventional [power sources], sort of cleaner but conventional. We’re looking at natural gas or liquefied natural gas as potential sources,” said Mr. Reyes.

He added the company has “to balance the challenges of cleaner and greener power generation and the affordability issues consumers keep on raising.”

The Department of Energy earlier said it is pushing for the development of the country’s natural gas industry, and is promoting the use of liquefied natural gas to investors into the power sector.

Meralco announced it approved the creation of a subsidiary to handle power generation projects of the company.

The distribution utility plans to put up 300 megawatts (MW) of peaking capacity by 2012 or 2013 and base load power plants up to 1,200 MW between 2014 and 2016.

The company earlier said it may also tap coal as a potential source for its power plants.

The power plants may be put up near the company’s franchise areas in Metro Manila and several surrounding provinces.

Mr. Reyes said any plans to expand outside of the company’s franchise area have not been discussed.

“I think [expansion into the Visayas] is not within our radar right now.

In the end, it’s all about we can do something that is going to be in the interest of consumers and communities. If we can help, and if we have the capability, then we will do it,” he said.

Mr. Reyes also said the company is talking with power generators “to see what the most cost competitive source of power is.”

For the nine-month period that ended September, Meralco posted a core net income of P9.2 billion, up 80% from P5 billion in the same period last year due to high energy sales.

The shift to the performance-based regulation scheme allowed the utility to earn P7 billion last year from P2.6 billion in 2008.

2009 also marked the entry of new shareholders -- Philippine Long Distance Telephone Co. (PLDT) and Metro Pacific Investments Corp. as well as San Miguel Corp.

Mediaquest Holdings, Inc., a subsidiary of the Beneficial Trust Fund of PLDT, has a minority stake in 
BusinessWorld.

Last October, Meralco announced plans to invest in power plants with a combined generating capacity of 1,500 megawatts over the next five years.

Meralco President and Chief Executive Manuel V. Pangilinan said the board approved the “power generation plans of Meralco.”

He said initial studies suggested that Meralco should build and own at least 1,500 MW in the next five years. -- 
Emilia Narni J. David

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