SMC plans to supply cheap power to Muslim provinces

By Lenie Lectura - January 16, 2017

https://www.businessmirror.com.ph/smc-plans-to-supply-cheap-power-to-muslim-provinces/

The power-generating capacity of the power plants that San Miguel Corp. (SMC) plans to put up in predominantly Muslim provinces would be sold for as low as P3 per kilowatt-hour (kWh), much cheaper than the prevailing rates sold to electric cooperatives (ECs) in Mindanao.

SMC President Ramon S. Ang said the company’s power business is pursuing plans to put up a 58-megawatt (MW) coal-power plant each in Tawi-Tawi, Sulu, and Basilan for a total of 174 MW.

“On our Mindanao projects, we have plans to put up a power plant in Jolo, Sulu. Also, there’s an intention to put up another one in Basilan and another one in Tawi-Tawi. All 58 MW each,” Ang said.

Electricity in these areas is being provided by various ECs that source power from the National Power Corp. (Napocor). These ECs, according to Ang, pay Napocor as much as P15 per kWh.  Ang said residents in these areas will benefit from the projects since power produced from coal plants are much cheaper than those generated by diesel-fired power facilities.

“Right now, Napocor is supporting Jolo, Sulu, with 25 MW. I am offering P3 per kWh to supply them 58 MW from the current rate of P15 per kWh. They have nothing to lose,” Ang said. His offer was accepted by Agriculture Secretary Emmanuel F.  Piñol.  “I am talking with Secretary Piñol. He will help us push through with these projects. Secretary Piñol agrees that these initiatives will create a very good growth. Can you imagine the unstable power supply in Jolo, Basilan and Tawi-Tawi? Then all of a sudden they have reliable power supply,” Ang added.

Should Napocor and SMC agree on this, Ang said his company would be able to put up the power plants in two-and-a-half years. He also proposed that the cheap rates be enforced for a period of 10 years.

Ang said the peace and order situation in the area does not discourage him from pursing the planned investments. “No issue. I have no problem operating in Basilan, Tawi-Tawi, Jolo,” he said. In June last year, Ang said SMC signified interest to put up power plants, develop a port and invest in bulk-water facilities in Mindanao.

A memorandum of understanding (MoU) with the Autonomous Region in Muslim Mindanao (ARMM) was already signed to help develop the area through investments in industries ranging from energy to ports and bulk-water facilities.

The  ARMM is comprised of Basilan, Lanao del Sur, Maguindanao, Sulu and Tawi-Tawi. It is an autonomous region in the Philippines and the only region that has its own government.

The MOU specifically covers an agreement for SMC to build a power plant and help provide long-term solutions to Mindanao’s power crisis.

Over the next two years SMC has committed to build the power plant that will serve the entire ARMM region, which will benefit an estimated 573,446 households.

At present, only 30 percent of households in the region have electricity. Brownouts, particularly during the summer months, are prevalent.

Ang said the ARMM represents one of the most underpenetrated markets in the Philippines, “but is a region ripe for investment, offering huge potential growth.”

SMC’s investment in the ARMM is in line with its strategy to locate facilities and production centers outside urban centers, creating strong “second-tier cities”, generating jobs and rebalancing the national economy by income and growth dispersal.

Instability, lack of infrastructure and lack of a stable power supply has made investors wary, but Ang said he hoped SMC’s vote of confidence in the war-torn province would create much-needed jobs, business opportunities and provide a major economic boost to the ARMM to ease worries over perceived investment risks.