Quezon Power Eyeing Meralco Supply

Manila Bulletin

By MYRNA M. VELASCO

September 26, 2012, 6:56pm

MANILA, Philippines — To viably underpin the planned 500-megawatt expansion of its coal-fired power plant in Mauban, Quezon Power Philippines Ltd. Co. has been tugging its way into advancing negotiations with power utility giant Manila Electric Company (Meralco) for an off-take or power supply agreement (PSA) that will cover the bulk of its additional capacity.

This was disclosed to reporters by Quezon Power managing director Frank Thiel in a press briefing following the conclusion of the Project Finance Forum convened by the BDO Group last Tuesday at the Shangri-La Hotel in Makati.

In line with its bid to corner Meralco’s nod on its targeted off-take deal, the company executive has indicated that they are willing to back that up with a partnership arrangement in the project’s corporate vehicle.

He indicated that since Meralco historically sounded off intent to gain majority ownership in power projects in which it would be involved in, Thiel noted that they are willing to offer that as a “leverage” to the utility firm.

“Meralco is our primary target. They are the off-taker of our QPPL-1 and it stands to reason that we would want them to be the off-taker also for the number 2 plant… so we’re concentrated on that right now,” he stressed.

Acknowledging the fact that all power developers in the Luzon grid are also ardently courting Meralco for off-take agreements, the Quezon Power executive noted that they can offer in the negotiations table some distinct advantages that can propel them ahead in the competition.

In particular, he noted that the facility’s expansion has already been granted an environmental compliance certificate (ECC) by the Department of Environment and Natural Resources (DENR) and that the plant’s existence in Mauban is already well-received by its host community.

Additionally, he stressed that since the expansion will already share some of the facilities of the first 460MW unit, they would be able to offer competitive rates to Meralco.

“We have the ECC already, we have the land, we have the transmission line and the sharing of facilities with the first unit will give us very competitive rates in terms of power prices,” Thiel has reiterated.

Beyond the Mauban plant expansion, Quezon Power has also been scouring for other opportunities in the power sector – and this could range from acquisitions to development of greenfield facilities, such as liquefied natural gas-fed power plant or even those that will utilize renewable energy resources.

“We’re also in the hunt for potential acquisitions,” he said, but there is nothing definite yet as to which assets they will be keen on considering.

With the changeover in Quezon Power’s equity ownership – shifting to Thai firm EGCO – it has been noted that their desire for operational expansion in the Philippines has just been turning more aggressive.    source