AboitizPower to expand reach of retail electricity supply business

Posted on May 16, 2017
http://www.bworldonline.com/content.php?section=Corporate&title=aboitizpower-to-expand-reach-of-retail-electricity-supply-business&id=145240

ABOITIZ POWER Corp. is expanding the reach of its retail electricity supply business as it expects to forge contracts for around 800 megawatts (MW) by 2020 or a fifth of its target net sellable capacity of 4,000 MW by that year, company officials said.

“Aside from selling to some of the utilities, we will pursue our goal of contracting to the contestable market,” said Erramon I. Aboitiz, chief executive officer of AboitizPower, in a press conference after the company’s annual stockholders meeting on Monday at Fairmont Hotel in Makati City.

“That’s the strategy and hopefully that’s a sector that we will contract most of the capacity that is coming up,” he said.

He said AboitizPower has at present around 500 MW of capacity contracted to contestable customers, or those consuming electricity within a threshold set by the Energy Regulatory Commission (ERC).

“We hope to be 700 (MW) by the end of the year,” said Luis Miguel O. Aboitiz, AboitizPower executive vice-president and chief operating officer for corporate services.

AboitizPower’s licensed retail electricity suppliers (RES) are Advent Energy, Inc., Prism Energy, Inc. and Aboitiz Energy Solutions, Inc. Its partnership with Norway’s SN Power has a separate RES: SN Aboitiz Power -- Res, Inc.

“We’d like to build it,” he said, referring to the company’s share of the contestable market or those with a monthly average consumption of 1 MW-hour for the past year that are required to buy electricity from a licensed RES.

“Each additional customer we get is smaller and smaller as the limit goes down and down,” he said, adding that the company was not stopping once it reached the 800-MW target.

The rules on retail competition and open access (RCOA), which are meant to lower the threshold by mid-year to those consuming an average of 750 kilowatt-hour to 999-kWh, are on hold after the Supreme Court granted a petition questioning the mandatory provisions of the regulations issued by the ERC and the Department of Energy.

AboitizPower is currently building more than 900 MW of capacity, which company officials said was progressing well and should come in on time and “more or less” within budget.

This year, AboitizPower expects to finish the 68.8-MW Manolo Fortich hydro power plant in Bukidnon and the 8.5-MW Maris Canal hydro project in Isabela through its subsidiary SN AboitizPower.

Together with partners, it is also completing the 340-MW Therma Visayas, Inc. baseload power plant in Toledo, Cebu and the 400-MW Pagbilao Energy Corp. plant expansion. It is commissioning an 8.8-MW biomass power plant in Lian, Batangas.

Liza Luz T. Montelibano, AboitizPower chief financial officer, said of this year’s capital expenditure of P59 billion, up from P38 billion last year, the bulk will go to the Manolo Fortich, Therma Visayas and Pagbilao projects.

“Pagbilao should come online by the end of this year. Manolo [Fortich], also around December,” she said, adding Therma Visayas should be competed by the late first quarter of 2018.

With the expected start by yearend of the construction of the 600-MW coal-fired power plant under Redondo Peninsula Energy, Inc. (RP Energy), a company led by Manila Electric Co, Ms. Montelibano said, “next year should be the full-year capex for RP Energy.”

“Based on what we’re working on today it (capex) should come down next year... unless there is a surprise,” she said, adding that AboitizPower’s holdings in RP Energy is only around 25%.

Last year, AboitizPower inaugurated the 300-MW Therma South, Inc. coal power plant in Davao and the 59-MW peak San Carlos Sun Power solar plant in San Carlos City, Negros Occidental.

On Monday, shares in AboitizPower, the holding company for the Aboitiz group’s investments in power generation and distribution, slipped 1.24% to P39.80 each.