Meralco to source power from SMC unit

MANILA, Philippines - Manila Electric Co. (Meralco) will secure part of its electricity requirements from a subsidiary of diversified conglomerate San Miguel Corp. (SMC).

“The company’s board of directors, in its regular meeting yesterday, approved the grant of authority for the company to enter into a power supply agreement with San Miguel Energy Corp. (SMEC),” Meralco told the local bourse.

However, the company has yet to specify how much electricity it will buy from the SMC subsidiary.

In February, the country’s largest power distributor said it is in talks with SMC for a power supply agreement to ensure continued supply of power to its customers.

Early this year, Meralco signed a seven-year supply deal with Therma Luzon Inc., a subsidiary of Aboitiz Power Corp. Meralco will source 350-megawatts (MW) of electricity from Therma Luzon’s 764-MW coal-fired plant in Quezon province.

Meralco wants to secure electricity from SMEC, which holds the independent power producer contract administrator license for the 1,200-MW Sual coal plant in Pangasinan.

The power distributor is locking up power supply deals amid expectations of higher electricity demand from its customers.

Meralco added 40,000 new customers in the first quarter, bringing the total to a record 5.07 million as of end-March. Meralco is indirectly controlled by Hong Kong-based First Pacific Co. Ltd. and partly owned by SMC.

Meralco, through unit Meralco PowerGen Corp., is building a 600-MW coal-fired power plant at the Subic Bay Freeport Zone in Zambales in partnership with Aboitiz Power Corp. and the local unit of Taiwan Cogeneration International Corp.

It is targeted to start commercial operations in 2015, increasing available electricity in the Luzon grid.

The coal plant in Subic is the first of Meralco’s numerous power generation ventures, targeting reach a power generation capacity of 1,500 MW.