RP Energy has no plans to downscale planned Subic coal-power plant

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SUNDAY, 01 JULY 2012 19:46 PAUL ANTHONY A. ISLA / REPORTER

SUBIC, Zambales—Power supply in the Luzon grid might end up being tight by 2015, as several stakeholders continue to oppose the construction of Redondo Peninsula Energy Inc.’s (RP Energy) 600-megawatt (MW) coal-fired power plant at the Subic Bay Freeport Zone.

Following its public consultation, Aaron Domingo, RP Energy president, said on Friday they do not plan to downscale their planned 600-MW coal-fired power plant. The public consultation, held at the Subic Bay Exhibition and Convention Center, was attended by more than 5,000 people from Subic, Zambales.

Domingo said the Luzon grid would probably experience power outages if the power plant begins operations later than 2015.

“If we can’t bring it online and the economy will continue to grow, we may experience blackouts,” he said.

Domingo said it would not be economical for them to only pursue a 300-MW coal plant, for which they have secured an environmental compliance certificate already.

“We would like to think that reason will prevail, if we show and we will show, that it is cheaper if we will build a 600-MW plant,” he said.

The planned Subic coal-fired power plant is designed to use two high-efficiency 300-MW units of the latest circulating fluidized bed (CFB) coal technology, which is estimated to cost $1.28 billion.

Domingo said the larger the capacity, the cheaper it will be, adding that they are confident they will secure the environmental compliance certificate.

RP Energy currently holds an ECC only for its first 300-MW unit.  The firm is currently in the process of holding public consultations with the Subic Bay Metropolitan Authority and other stakeholders for the issuance of its ECC for its second 300-MW unit. 

Domingo allayed the fears of Subic residents and stakeholders that the plant will pollute the environment, endanger the health of the people, and put at risk the tourist potential of the area.

“We’re here to address issues that are relevant to stakeholders such as the environmental and socioeconomic benefit. In the environmental side, we try to address it by using the latest and the best available technology to make sure that it will be environmentally benign, and that we comply with the requirements of DENR. At the same time, the socioeconomic benefits, we are addressing that, as the community must benefit,” he said.

Domingo said they are also willing to sit down and work with SBMA and the provincial government of Zambales to address the issue on real-property tax (RPT).

“With regard to the RPT, we have sought advice and are being advised now how the RPT will be handled and in the next several weeks that will be clear and RPT will certainly benefit the community,” he said.

Domingo said they are seeking guidance from a top accounting firm on the interpretation of the real-property tax because while the plant will be located inside the free port, it will sell its output to the Luzon grid.

“If you’re selling inside Subic or exporting, you’re not going to be subject to RPT. But majority of the power will be sold outside, and for that reason we have conflicting tax policies. We’re seeking clarity on that issue and once we clear then we will have to follow the law,” he said.

Domingo said they are also willing to shut down their power plant if it does not conform to environmental standards required by the law. 

Domingo said they are not keen on relocating the plant somewhere else, saying that a coal power plant has specific site requirements that you cannot find elsewhere, and that it must be able to connect to the grid.

RP Energy is led by Meralco PowerGen Corp., a subsidiary of Manila Electric Co., which holds 50 percent plus two shares, while Aboitiz-controlled Therma Power Inc. and Taiwan Cogeneration International Corp. Philippine branch hold the remaining shares in equal proportion.

RP Energy earlier said they target to complete the coal project by 2015.

The Department of Energy earlier warned any delay in the construction of the plant may put Luzon’s power supply in a precarious situation in the next three to five years.wered plant     source