SMC Power unit set to supply electricity to new off-takers

By Lenie Lectura - January 26, 2017

http://www.businessmirror.com.ph/smc-power-unit-set-supply-electricity-new-off-takers/

SAN MIGUEL Consolidated Power Corp. (SMCPC) is eyeing to supply at least 160 megawatts (MW) of power to new off-takers, including a cement plant to be put up by SMC President Ramon S. Ang.

Ang said a steel plant and a cement plant would source electricity from the company’s coal plant in Malita, Davao del Sur.

“Later on, may magtatayo ng steel mills doon at magtatayo ako ng cement plant. Ang lugar na iyon ay sisikat. Ang employment na mage-generate, dadami,” Ang said.

He added that “the requirement of the steel mills is around 130 MW” while “the cement plant needs about 30 MW.”

Ang did not identify the steel manufacturer, saying a nondisclosure agreement was already signed.

Through his company Eagle Cement, Ang will put up a new cement plant with the capacity to produce 2 million tons, or 50 million bags, of cement per year. Ang said the first 150-MW unit of the P25.8-billion coal facility is already running. The second unit, another 150 MW, is scheduled for commercial operation in March this year.

The new 300-MW power plant is part of a 2,000-hectare industrial estate SMC is building in the province accredited by the Philippine Economic Zone Authority.

“Economic zones attract a lot of attention now. Ang daming nagpupuntahan at nag re-relocate doon,” Ang said.

The coal plant would have two more units, each with a 150-MW capacity, to be constructed.

“Iyong third and fourth, antay lang namin ang locators,” he said.

The remaining capacity of the first two units was already sold to various electric cooperatives (ECs) at cheaper rates. “Sold na iyun sa mga co-ops. Natulungan pa nami ang mga coop. Ang bili ng mga co-op sa Mindanao magkano? P10 or P9 per kilowatt hour (kWh). Ang benta namin P3. Nahilo silang lahat. Napababa nila ang cost nila,” said Ang.

Earlier, the ERC decided to grant interim relief on SMCPC’s  power supply contracts (PSCs) with five distribution utilities (DUs) based in Mindanao.

The grant of an interim relief will allow SMCPC to obtain financial closing with various lenders as it will be authorized to implement its respective PSCs pending approval from the regulators.

The DUs, in turn, may already include in the computation of their generation charge the costs incurred for the supply that will be eventually sourced from SMCPC’s power plant.

SMPC will supply 10 MW to Cotabato Electric Cooperative Inc.; 5 MW to Surigao del Sur II Electric Cooperative Inc. II; 35 MW to Zamboanga City Electric Cooperative Inc.; 10 MW to Davao del Sur Electric Cooperative Inc.; and 10 MW to Agusan del Sur Electric Cooperative Inc. All contracts are valid for 10 years.

Based on initial evaluation by the ERC, the proposed rates in the PSCs are lower compared to two comparable plants having the same fuel source and capacity.  In the event that the final rate is higher than that of the interim rates granted, the resulting additional charges would be collected by SMCPC from the concerned DUs. On the other hand, if the final rate is lower than that granted in the interim, the amount corresponding to the reduction would be refunded by SMCPC to the concerned DU.