Corporate News

Metrobank coal plant seals deal with Panay utility firm

Posted on September 08, 2011

PANAY ENERGY Development Corp. (PEDC), a unit of the Metrobank group, has been allowed to sell output from its new power plant to Panay Electric Co., Inc. at a contracted price, an official notice showed.

The Energy Regulatory Commission (ERC), in a decision dated Aug. 22, approved a supply agreement between the two parties but asked PEDC to submit actual costs it incurred during the testing and commissioning period before a final rate can be approved.

In the meantime, the capital recovery fee has been pegged at P3.4471 per kilowatt-hour (kWh), the peso operating and maintenance fee at P0.5081/kWh and the dollar operating and maintenance fee at $0.0109/kWh.

PEDC and the cooperative had entered into the agreement to provide 65 megawatts (MW) of power to the area for 25 years.

Power will be sourced from PEDC’s 164-MW, coal-fired power plant in Iloilo City which was inaugurated in April this year.

Last year, the ERC already provisionally approved the agreement with a rate of P2.3081/kWh.

The companies alleged in their petition to the ERC that there are limitations to the current supply of electricity to the island hence the need for the agreement.

“The quality and reliability of electric power in Panay are deteriorating, particularly during peak, when the bulk of the power requirements come from the Negros Island, which is dependent on the submarine cable connecting Negros and Panay. The limitation in the capacity that this cable can take inevitably limits the supply of electric power to Panay,” the decision stated.

It added “the additional capacity from the PEDC power plant… can significantly address the power supply shortage within [the] franchise area.”

Aside from the said cooperative, PEDC also supplies energy to distribution utilities in Guimaras, Capiz, Antique, Central Negros and Aklan.

PEDC’s power plant consists of two 82-MW units and cost about $405 million.

PEDC began construction in the power plant in January 2009 and was finished March this year.

Generation unit created

In a related development, the Securities and Exchange Commission has approved the establishment of Semirara Mining Corp.’s new power subsidiary South Luzon Power Generation Corp., the mining firm disclosed to the bourse yesterday.

South Luzon Power has a capitalization of P10 billion with capital stock divided into 10 billion shares with a par value of P1 per stock.

The new subsidiary will “acquire, design, develop, construct, expand, invest in and operate electric power plants” as well as invest in missionary electrification.

Last June, Semirara Mining said it had planned to put up a new unit that will construct four new power plants and increase its generating capacity to 1,200 MW from the current 600 MW. -- Emilia Narni J. David