SMC power unit seeks Visayas contracts

MANILA, Philippines - A power producer unit of diversified conglomerate San Miguel Corp. (SMC) wants to sell electricity to a Visayas-based power distributor.

In a public notice, San Miguel Energy Corp. (SMEC) said it applied for regulatory approval for an energy supply contract with Camarines Sur III Electric Cooperative Inc. (Casureco III).

“There is a necessity for the immediate and provisional approval of the instant application in order that there will be no undue disruption in the power supply,” SMEC and Casureco III said.

The energy supply deal is effective from December 2011 to Dec. 2016.

Under the contract, Casureco III will pay SMEC P3.6 per kilowatt-hours (kwh) to P7.78 per kWh in January to June and P3.12 per kWh to P7.78 per kWh in July to December, all depending on the time of use.

Casureco III’s supply deal with the National Power Corp. expired late in 2011, prompting the electric cooperative to conduct a selection process for a new deal.

It invited SMEC and AP Renewables Inc., but only the SMC unit submitted an offer.

Casureco III’s board of directors approved the proposal of SMEC for a five-year power supply.

Member-consumers of the power distributor are seen to benefit from competitive cost of power and discounts under the new contract, Casureco III said.

For instance, the company can enjoy a three-percent prompt payment discount, which will be passed on to consumers.

The ERC, for its part, scheduled a public hearing for the proposal on November 20, 2012 in Camarines Sur.

Casureco III holds the franchise to operate a light and power service in Iriga City and the municipalities of Baao, Balatan, Bato, Buhi, Bula and Nauba, all in the province of Camarines Sur.

SMEC is the independent power producer administrator of the 1,294-megawatt (MW) Sual coal-fired thermal power plant in Pangasinan. Plant owner TeaM Energy Philippines Corp. will have to turn over the facility SMEC by 2025 under an earlier agreement.

Existing customers of SMEC include Camarines Sur 1 Electric Cooperative, Quanta Paper, Ilocos Norte Electric Cooperative, Central Azucarrera de Tarlac and Isabela 1 Electric Cooperative.