SEMIRARA Mining and Power Corporation (SMPC) on Tuesday said its retail electricity unit has signed a 4-megawatt (MW) retail supply contract with a steel manufacturing company based in Luzon.
In a disclosure to the stock exchange, the Consunji-led energy company said Sem-Calaca RES Corporation’s (SCRC) supply contract, which started in September, will last for 15 months.
“We expect a challenging 2019 for the local power industry because of increasing power supply in the market and the growing competition for power contracts. With the increasing contestable customers switching to retail suppliers, the RES (retail electricity supplier) market could be a bright spot for SMPC,” SMPC President and Chief Operating Officer Victor A. Consunji was quoted as saying in a statement.
RES refers to a person or entity “authorized to sell, broker, market or aggregate electricity to the ‘contestable’ market.” Starting this year, the threshold for the 12-month average peak demand to qualify to become a contestable customer was brought down to 750 kW from 1 MW.
“We are in talks with a number of contestable clients for an aggregate volume of 150 MW. The negotiations are in various stages of negotiation,” Mr. Consunji said.
Mr. Consunji expressed confidence that SCRC can compete with other RES players, as it provides customers with customized solutions in managing electricity costs.
SCRC offers affordable electricity prices “by securing sufficient supply from affiliate power plants Sem-Calaca Power Corporation and Southwest Luzon Power Generation Corporation, other independent power generators, or from the Wholesale Electricity Spot Market.”
Parent company SMPC reported a 23% drop in consolidated net income to P8.9 billion as of September this year from P11.6 billion a year ago as coal and energy sales both declined during the period.
Coal sales dipped 4% to P17.7 billion during the nine-month period, as production slipped 10% to 8.9 million metric tons. Revenues from the power business decreased by 11% to P13.2 billion on weaker plants’ performance.
