SMC power unit forges supply deal with Central Luzon coops

MANILA, Philippines - Central Luzon households have been assured of a secured electricity supply starting next year after electric cooperatives in the region signed a 20-year power supply deal with SMC Global Power Holdings Inc.

The power unit of diversified conglomerate San Miguel Corp. recently signed a power supply agreement (PSA) with  Central Luzon Electric Cooperatives Association (CLECA), SMC president and chief operating officer Ramon Ang said.

SMC will source electricity from its 600-megawatt (MW) Limay coal-fired power plant in Bataan, of which 300 MW is covered under the deal.

Ang noted the contract price for the electricity is at P3.20 per kilowatt-hour (kwh) for a period of 20 years, lower compared to the usual P6-8 per kwh contract price.

“This will be the benchmark from now on. Others that will be selling electricity will try to align their price at P3.20 per kwh,” he said.

“At this price, consumers will be expecting low electricity rates soon,” the SMC chief added.

Started construction in 2014, the Limay coal-fired power plant is targeted for completion next year.

It tapped Formosa Heavy Industries as engineering, procurement and construction contractor, the same contractor for the 300-MW Malita, Davao coal-fired project.

The Limay and Davao plants will add 900 MW to SMC’s total generating capacity of 2,545 MW as of July this year.

SMC Global is further beefing up its portfolio with a couple of 300-MW coal-fired power plants in Cebu and Panay, and a 300-MW expansion of its Malita, Davao plant.

As of end-2012, the group has one of the biggest generation companies in the country with a 17 percent market share of the power supply of the national grid and 23 percent share of the Luzon grid.