TeaM wants Meralco tie-up

Manila Standard Today

by Alena Mae S. Flores

TeaM Energy Corp., a joint venture between Tokyo Electric Power Corp. and Marubeni Corp. of Japan, has expressed interest to tie up with Manila Electric Co. for its planned entry into the power generation business.

TeaM Energy president Federico Puno told reporters that the company, like many power generators, in the Philippines, was hoping to strike a deal with Meralco, the biggest retailer in the Philippines.

“We are willing to join. All of us are standing in line,” Puno said, citing Meralco’s 4.5 million customers in its franchise area in Metro Manila and the suburbs.

Meralco wants to build power generation facilities with a total capacity of 1,500 megawatts over the next five years. It is looking at a generation cost of less than P5 per kilowatt-hour.

Meralco is looking at technical partners and prefers a 51-percent stake in future power plants in its bid to lower the cost of electricity to consumers.

Puno said TeaM Energy planned to expand its presence in the local power industry. TeaM Energy’s shareholders Tokyo Electric and Marubeni acquired the assets of Mirant Corp. in the Philippines in 2007, which included the Pagbilao and Sual coal plants and a 20-percent stake in the Ilijan gas project operated by Korea Electric Power Co.

Puno said the company was in talks with San Miguel Corp. and Aboitiz Power Corp. to expand the Sual and Pagbilao coal facilities.

TeaM Energy plans to expand the 735-MW Pagbilao coal plant in Quezon province by 400 MW and the 1,200-MW Sual facility in Pangasinan province by 600 MW.

Puno said the Pagbilao expansion could cost around $500 million while Sual’s was estimated at $1 billion.

San Miguel acts as trader of the electricity output of the Sual plant while Aboitiz administers the contract of the Pagbilao coal facility.

“We have started talks with San Miguel and Aboitiz. We want to expand Sual and Pagbilao because of the common facilities. There’s the pier, the water treatment plant. Greenfield, or new power plants, will cost around $1.5 million per MW while this one is around $1 million to $1.2 million, which gives us advantage,” he said.