Meralco takes control of Subic

Published : Saturday, July 23, 2011 00:00

Article Views : 311

Manila Times.net Written by : Euan Paulo C. Añonuevo, Reporter

MANILA Electric Company has formalized its entry into the consortium that will put up its power plant.

In a disclosure to the Philippine Stock Exchange, Meralco said wholly-owned subsidiary Meralco Power Gen Corporation signed a shareholders’ agreement with Therma Power Inc. and Taiwan Cogeneration International Corporation for the planned 600-megawatt coal plant at the Subic Bay Freeport Zone.

Under the agreement, MGPC will take majority control of Redondo Peninsula Energy Inc., the consortium that will implement the proposed project.

A unit of Aboitiz Power Corporation, Therma Power and the local arm of Taiwan Cogeneration will retain less than a 50 percent stake in the project.

The proposed Subic Bay coal-fired power plant is projected to commence commercial operations in 2014.

Meralco, which has over 4.8 million connections, distributes electricity to Metro Manila and parts of neighboring provinces, a large area that churns out more than half of the Philippines’ economic output.

To secure its franchise area’s power supply and trim rates, Meralco earlier bared plans to produce the electricity it wheels to its customers.

It is looking to build power plants with a total capacity of 1,500 megawatts to fill an expected increase in demand in the coming years.

The new power plants are estimated to cost $2.3 billion and are expected to be operational within the next five to six years.

Under current regulations, utilities are allowed to source less than half of their power requirements from their own plants.

Meralco’s shares fell to P280 on Friday from its previous close of P284. AP shares rose to P32.2 from P31.6.