‘Sustainability at heart of Meralco operations’

By Lenie Lectura - February 28, 2020

https://businessmirror.com.ph/2020/02/28/sustainability-at-heart-of-meralco-operations/

The Manila Electric Company (Meralco) has established a Sustainability Office (SO) as an affirmation of its commitment to sustainability as core to its strategy and operations.

“With the establishment of the SO, we have affirmed our commitment to sustainability as front and center to our business, as core to the company’s strategy and operations. Given this, we have identified four areas we will focus on as we drive this sustainability agenda,” said Meralco Chief Sustainability Officer Raymond Ravelo.

The four focus areas of Meralco’s sustainability agenda include Planet, People, Power and Prosperity.

Under “Planet,” Ravelo said Meralco would continue to develop and execute programs to help preserve and protect environment.

On “People,” Ravelo said this captures Meralco’s effort to embed a sustainable mindset within the organization and put these principles into practice.

Ravelo said that a big part of the company’s sustainability program, which is under “Power,” is ensuring that all unserved and underserved areas within its franchise are energized. For “Prosperity,” Ravelo said this could be achieved by ensuring that all decisions as a company, initiatives and investments are guided and balanced by sustainability principles.

Starting this year, Meralco’s sustainability initiatives will be driven by an overarching program called Powering the Good Life in which five priority areas have been identified.

“The first 3 are PLANET related—direct emissions reduction, resource efficiency and waste management. The 4th area, Community Electrification captures our POWER initiative. And finally Workplace Excellence will house our PEOPLE programs,” he said.

Meralco, he said, has launched a number of projects under each of these pillars.

Under Direct Emissions Reductions, the company is looking at installing solar PV systems on its facilities and offices. Also, it will evaluate its entire vehicle fleet to identify which units could be electrified.

Under Resource Efficiency, Meralco said it will “greenify” Lopez Building by continuing to replace lights with LEDs and also to convert air conditioning units to inverter type ones.

Finally, under Waste Management, Meralco has implemented a company-wide ban on single-use plastics.

EDC eyeing to build binary plants

By Jonathan L. Mayuga - February 28, 2020

https://businessmirror.com.ph/2020/02/28/edc-eyeing-to-build-binary-plants/

The Energy Development Corp. (EDC) is targeting to put up binary plants in each of its existing geothermal plants in the country to boost its power-generation capacity by the end of the year.

A unit of the Lopez-owned First Gen Corp. which has the largest portfolio of power plants using clean and renewable technology, EDC is a geothermal energy industry pioneer in the Philippines.

The company said the binary plants will allow the company to enhance its power-generation capacity without building new power plants outside existing geothermal concessions.

EDC currently operates geothermal plants in Kananga and Ormoc Leyte; Valencia in Negros Oriental; Bacon in Sorsogon and Manito in Albay; and Kidapawan in North Cotabato.

Interviewed at the sidelines of the 3rd Philippine Environmental Summit in Cagayan de Oro City, Allan V. Barcena, head of Corporate Social Responsibility and Frances L. Ariola, specialist Corporate Communications of EDC bared that this year, the company is focusing on binary plants.

“When you say binary plants, these are low-capacity plants with 5 to 20 megawatts. They are easy to set up,” said Barcena. “We plan to have one per site. The source of binary plants is geothermal steam. We are now complying with the permit requirements.”

Compared to big capacity conventional power plants with a capacity of 100 megawatts  or more, binary plants do not need huge investments, as these are located inside existing geothermal concessions.

Barcena explained that most of the remaining expansion areas for geothermal energy in the Philippines are inside Protected Areas.

The permitting process for development projects in Protected Areas are “very tedious,” especially because existing law prohibits disruption of ecosystems and wildlife that thrives in these areas that are set aside for conservation.

Currently, the geothermal plants of EDC have a power generation capacity of up to 1,400 megawatts.

“These binary plants are actually to maximize steam and there’s no need to build plants,” he said.

He added that in doing so, EDC will be pioneering the reinjection technology, a heat recovery process wherein excess heat from wet steam will be harvested and reinjected in the reservoir. Over time, the excess heat adds to the sustainability of power-generation capacity of the plants.

“Steam in the Philippines is wet steam.  Before it gets to the turbine, the water called brine are usually thrown away. Here, we will harvest them and reinject it into reservoir and overtime, to produce more heat,” he said.

He also said the binary plants the company plans to build are all inside the geothermal concession, hence, it will not require the company to undergo a tedious permitting process compared to building a new plant outside existing concession areas.

EDC, he said, does not have new concession areas and do not plan to go inside Protected Areas because of the challenge of the permitting process.  Also, he said it has something to do with the company’s strong commitment to protecting the environment.

The company, which has a total capacity of close to 1,500 megawatts, also operates a solar farm in Burgos, Ilocos Norte, and Hydropower plant in Pantabangan, Nueva Ecija.  It is venturing in solar rooftop power generation, targeting shopping malls.

EDC has a share of 37 percent of the total renewable energy power generation the capacity of the Philippines.

MGen projects delayed as deliveries from China hit snag

Danessa Rivera (The Philippine Star) - February 27, 2020 - 12:00am
https://www.philstar.com/business/2020/02/27/1996282/mgen-projects-delayed-deliveries-china-hit-snag

MANILA, Philippines — Projects of Meralco Powergen Corp. (MGen, the power generating unit of Manila Electric Co. (Meralco), are encountering delays due to the coronavirus epidemic.
MGen president and chief executive officer Rogelio Singson said the company remains committed to
shifting to clean energy as it pursues its target of 1,000 megawatts (MW) of renewables capacity.
However, the company is facing some challenges in its first wave of solar projects due to delayed delivery of solar panels from China.
“We encountered some delays because the PV (photovoltaic) panels that are coming from China have not been shipped out,” Singson said.
One of the affected solar projects is in Tarlac, which was originally targeted for completion by the middle of the year.
“One project in Tarlac, about close to 30 percent has been delivered, but unfortunately we were hoping  this will be commissioned in the middle of this year. We think there may be a push back because of the nondelivery of panels,” Singson said.

The other project is located in Bulacan, wherein the contractor and solar panels are both coming from
China. MGen hopes the panels will be delivered this summer.
While waiting for the solar panels to be delivered, MGen is proceeding with the other construction works in both sites.
“Actually [they’re] a go. We’re just delayed because of the delivery of the panels. The construction is
ongoing, fencing is almost done, site clearing has been completed,” Singson said.
MGen has a commitment to undertake the development of 1,000 MW of renewable energy projects in the next five to seven years. Plans  also include the development of large-scale solar, wind and hydropower projects that will provide reliable, environment-friendly power at competitive prices without the need for subsidy.

Vivant Corp.: We have nothing to do with ‘Vivant’ that owes PSALM P4 billion

By Lenie Lectura -  February 26, 2020
https://businessmirror.com.ph/2020/02/26/vivant-corp-we-have-nothing-to-do-with-vivant-that-owespsalm-p4-billion/

CEBU-BASED Vivant Corporation clarified on Monday that it has no unpaid obligations with the Power Sector Assets and Liabilities Management Corp. (PSALM).
“Vivant Corp. and our subsidiaries Vivant Energy Corp. and Vivant Renewable Energy Corp. are not
connected with Vivant-Sta. Clara Northern Renewables Generation Corp.,” it said.
The listed firm released this statement after PSALM said Vivant-Sta. Clara Northern Renewables
Generation Corp. (Northern Renewables), which administers the Ippa (Independent Power Producer
Administrator) agreement for the Bakun Hydroelectric power plant in Ilocos Sur, has an unpaid account of P4.19 billion.
Vivant Corp. said the “Vivant” in Vivant-Sta. Clara is a remnant from its previous engagement with Northern Renewables, but “we have since sold our complete stakes in Vivant -Sta. Clara Northern Renewables Generation Corp, which was equivalent to 48 percent, as far back as October 2018.
“That said, we are not connected to the Bakun hydroelectric power plant in Bakun, Alilem, Ilocos Sur. That project is fully owned by Northern Renewables,” it pointed out.
Vivant Corp. added that it has no delinquent accounts with PSALM, and is fully compliant and up-to-date with all payments. PSALM earlier said that it would go after IPPAs with delinquent accounts amounting to a total P33.62 billion. Finance Secretary Carlos Dominguez III, who chairs the PSALM Board, has instructed PSALM to pursue all legal remedies to compel these Ippas to pay up at once.
In 2019, PSALM  was able to collect P70.41 billion combined from its various IPPAs.
If the P33.62-billion delinquent accounts remain unpaid by the IPPAs, PSALM will incur an annual borrowing cost of about P1.7 billion a year—a substantial amount that the government could have used otherwise to spend more on its priority programs on infrastructure and human capital development.
The P33.62-billion delinquent accounts are part of the P95 billion in unpaid charges owed to PSALM not only by IPPAs but by other industry players as well such as electric cooperatives (ECs), plus receivables inherited from the National Power Corporation or those still subject to reconciliation.

PSALM ordered to file ‘collection cases’

Published February 26, 2020, 10:00 PM By MYRNA M. VELASCO
https://business.mb.com.ph/2020/02/26/psalm-ordered-to-file-collection-cases/

State-run Power Sector Assets and Liabilities Management Corporation (PSALM) has been instructed by the Department of Finance (DOF) to initiate the filing of “collection cases” against companies that have unpaid receivables, because their settlements could help beef up the company’s cash hoard by additional P10 billion.
The collection mandate of Finance Secretary Carlos Dominguez III was channeled through Finance
Undersecretary for Legal Affairs Bayani Agabin, who is his alter ego at the PSALM Board.
Agabin said the directive of the finance chief is for PSALM “to immediately initiate collection cases against the erstwhile IPPAs (independent power producer administrators) of the Unified Leyte strips of energy in Tongonan, Leyte; particularly Good Friends Hydro Resources Corporation of Fernando Borja.”  Another target for immediate collection of unpaid obligations is Waterfront Mactan Casino Hotel, Inc. of businessman William Gatchalian, who happens to be the father of the chairman of the Senate committee on energy Sherwin T. Gatchalian.
The Waterfront Hotel’s delinquency of ₱87.74 million was among the smaller amounts being chased by the government for collection, but for most players in the power industry, the settlement of that account is symbolic because it assures that this will not end up to be a stranded debt that could be subsidized or written off by the Murang Kuryente Act authored by Gatchalian; which in essence, the Malampaya fund or the consumers will end up paying for if it will not be settled.
PSALM President Irene Joy Garcia said “we have already released a demand letter (to Waterfront Hotel),” but she said the company had not settled so they needed to elevate the matter to the board.
She expounded that the DOF had then instructed PSALM “to endorse already the matter to the OGCC (Office of the Government Corporate Counsel) for initiation of collection remedies.”
The Waterfront Hotel receivables along with the other unpaid obligations of the IPPAs form part of the ₱95 billion worth of arrears that PSALM has been running after with various customer-firms, including the dispute with San Miguel Corporation on the Ilijan plant.
For IPPA-firm Good Friends Hydro Resources, its unsettled obligations hovered at ₱1.21 billion; and there is also aggregate ₱3.8 billion being pursued with the Gotianun-owned FDC Utilities Inc. for IPPA deals on Mount Apo I (₱1.17 billion) and Mount Apo II (₱2.63 billion) geothermal plants; then ₱4.19 billion with the Vivant-Santa Clara Northern Renewables Generation Corporation, which is the IPPA for the Bakun  hydroelectric power facility in Ilocos Sur.
PSALM explained that both IPPA pacts with the subsidiaries of Filinvest “were terminated for non-payment,” adding that “the amounts due to PSALM are the subject of two separate arbitration proceedings initiated by these Filinvest companies.” It was further qualified though that the Gotianun group already expressed willingness to settle such obligations.
For the Vivant-Santa Clara receivables, PSALM said it is expecting “to collect additional payments from Northern Renewables this 2020, in view of a settlement agreement they had submitted to the court.”
Meanwhile, the subsidiary of San Miguel Corporation – South Premiere Power Corporation (SPPC) – has indicated that it did not receive any billing yet for the ₱23.94 billion worth of ‘unpaid obligations’ being claimed by state-run Power Sector Assets and Liabilities Management Corporation. Instead, the diversifying conglomerate stipulated that it just learned of the new figures via statement of the government-owned firm channeled through the media.
“SPPC has not received any billing statement from PSALM claiming the alleged unpaid amount of ₱23.94 billion. PSALM has released the figure to the media instead of informing affected party SPPC or SMC,” the company has lamented.

SMC power unit open to proposals to settle PSALM obligation

February 26, 2020 | 10:21 pm
https://www.bworldonline.com/smc-power-unit-open-to-proposals-to-settle-psalm-obligation/

A SAN MIGUEL CORP.-owned power firm told legislators it “welcomes” any proposals to settle its
obligations with the Power Sector Assets & Liabilities Management Corp. (PSALM), which its parentcompany has long disputed.
Jupiter M. Cabaguio, representing South Premiere Power Corp. (SPPC) at a House hearing conducted bythe committees on good government and public accountability and on public accounts, said the firm willevaluate any plans to settle the obligations, which PSALM estimates at P245.76 million.
“For the meantime your honor… we will welcome any plans or any proposals to settle this,” he said.
San Miguel Corp. President and CEO Ramon S. Ang has long disputed PSALM claims that its power unitowes money to PSALM, adding that the company, which operates the Ilijan gas-fired plant in Batangas,has adhered to the terms of its Independent Power Plant Administration Agreement (IPPA) awarded in2010.
The committees were tackling the issue of PSALM’s receivables, with one senior committee member urgingSPPC to consider “the public good.”“It’s very clear (in the) record that SPPC is making money. They issued dividends. I think it’s about timeyou should reconsider. At the end of the day, you should relay to your (superiors that) what we’re doinghere is for the public good,” Representative Luis Raymund F. Villafuerte, Jr., a Deputy Speaker fromCamarines Sur said.

In her presentation during a House hearing on Feb. 19, PSALM President and Chief Executive Officer IreneJoy J. Besido-Garcia reported a total of P95.42 billion worth of overdue receivables, as of the end of 2019.
PSALM’s corporate life will end on June 2026. According to Ms. Besido-Garcia, if PSALM fails to collectthe unpaid receivables, the national government will take over the job of collecting.
PSALM was tasked to manage “the orderly sale, disposition and privatization” of power generation assetswith the objective of “liquidating all (National Power Corp.) financial obligations and stranded contract costsin an optimal manner.”
PSALM’s collections will go towards settling the maturing obligations of the National Power Corp. —Genshen L. Espedido

ERC provisionally clears Meralco power deals that had CSP in ’19

By Lenie Lectura - February 26, 2020

https://businessmirror.com.ph/2020/02/26/erc-provisionally-clears-meralco-power-deals-that-had-csp-in-19/

THE Energy Regulatory Commission (ERC) has provisionally approved the Manila Electric Company’s (Meralco) power supply agreements (PSAs) that underwent competitive bidding last year.

“The ERC granted provisional authority to implement the PSAs for the 1,200megawatt (MW) baseload capacity on December 23, 2019 and for the 110MW mid-merit capacity on January 30, 2020,” said Meralco.

The 110MW forms part of the 500MW, five-year contract that was won by First Gen Hydro Power Corp., Phinma Energy Corp. and South Premiere Power Corp. (SPPC).

It was Phinma Energy Corporation’s contract, involving a supply of 110MW to Meralco, that was given the green light by the ERC. The power supply contracts of First Gen Hydro Power Corp. to supply Meralco 100 MW of capacity and SPPC for 290MW have yet to be approved by the ERC.

Meanwhile, the ERC-approved 1,200MW power supply contract was forged with PHINMA Energy, SPPC and San Miguel Energy Corporation (SMEC).

Meralco successfully concluded the Competitive Selection Process (CSP) for the 1,200MW baseload and 500MW mid-merit capacities, respectively, in September last year. Thereafter, Meralco filed applications for approval of these PSAs with the ERC.

With the provisional approval, Meralco can already implement these power deals.

The utility firm has lined up a total of three CSPs. The last one—a 1,2000MW supply contract for 20 years—has yet to undergo CSP.

Meralco First Vice President and Head of Regulatory Management Atty. Jose Ronald V. Valles said the Third Party Bids and Awards Committee (TPBAC) is currently going over the revised terms of reference (TOR) for the 1,200MW power supply contract.

“We wait for their advice as to when will this be published,” he said, adding that actual bidding may take place in two months if the TOR is published by next week.

The publication date of the TOR also depends on the Department of Energy’s (DOE) reply regarding a concern raised by a prospective bidder. “We intend to file a letter to the DOE in response to the query made by a prospective bidder with respect to replacement energy. We will need to await for DOE clarification on that before we finally decide to publish the TOR,” added Valles.

He identified the bidder as GNPower, which wants to include in the TOR a 30-day scheduled plant maintenance and a 15-day forced outage allowance instead of a zero-outage allowance.

“The concern raised by GNPower was about the obligation for replacement power. They are saying that the generator, prospective bidder, cannot afford to have zero outage allowance. They are asking for 30 days scheduled maintenance and 15 days forced outage allowance to be reflected in TOR,” explained Valles.

“Within the outage allowance, the distribution utility will have the obligation to procure the replacement power and charge that replacement power to consumers. But beyond outage allowance, beyond the 30 days and 15 days, the generator will have to procure that replacement power at its own risk,” added Valles.

Revised TOR hailed

Meralco president Ray Espinosa said he is pleased with the outcome of the revised TOR, following the intervention of the DOE, which wanted more power firms to participate in the auction.

“That’s why it became important to work out a good terms of reference so we’re able to attract more bidders. I think we have a balance and good TOR already, subject to only one clarification, which relates to the replacement power, obligations related to outages. After that, we should be good to go.