ERC okays power supply deal between SMC unit, Bicol co-op

By Neil Jerome C. Morales (The Philippine Star) Updated March 17, 2012 12:00 AM


MANILA, Philippines - The Energy Regulatory Commission (ERC) has approved the contract allowing San Miguel Energy Corp. (SMEC) to sell power to an electric cooperative in Bicol.


Under the deal, SMEC, the energy arm of the San Miguel conglomerate, can now supply power to Sorsogon II Electric Cooperative Inc. (Soreco II) for two years.


“The Commission provisionally approves the energy supply contract between Sorsogon II Electric Cooperative Inc. and SMEC,” the regulator said.


Soreco II and SMEC filed an application for the energy supply contract in September last year.


The parties said the contract of state-run National Power Corp. (Napocor) to supply electricity to Soreco II has already expired.


Soreco II said it is mandated by the Electric Power Industry Reform Act to ensure the quality, reliability, security and affordability of its power supply.


It has the obligation to supply electricity in its captive market at the most affordable cost, it added.


“There is a necessity for the immediate and provisional approval of the instant application in order that there will be no undue disruption in the power supply,” Soreco II and SMEC said.


SMEC owns the 1,292-megawatt (MW) Sual coal-fired thermal power plant in Pangasinan that is operated by TeaM Energy Corp. The power plant is composed of two units with an installed capacity of 647 MW.


Under the contract, SMEC will sell between 4,000 MW-hours (mwh) to 6,000 mwh of power per month to Soreco II. SMEC will deliver the power at a voltage of 13,800 kilovolts.


“The applicable fees of Soreco II’s contracted monthly or hourly energy consumption are broken down into hourly rates,” ERC said. Rates vary from P2 to P6 per kilowatthour depending on the day and time of delivery.


Other existing customers of SMEC include Camarines Sur 1 Electric Cooperative, Quanta Paper, Ilocos Norte Electric Cooperative, Central Azucarrera de Tarlac and Isabela 1 Electric Cooperative.