MANILA, Philippines - Pilipinas Shell Petroleum Corp. has received the backing of the Department of Energy (DOE) to sell excess power through the country’s electricity spot market.
The DOE-Electric Power Industry Management Bureau has endorsed to the Securities and Exchange Commission (SEC) Shell’s amendment of its Articles of Incorporation, expanding its secondary purpose to include sale of excess electricity through the Wholesale Electricity Spot Market (WESM).
The bureau did not object the oil firm’s plans to sell electricity but directed it to comply with the provisions of existing laws such as the Electric Power Industry Reform Act of 2001 (EPIRA) and the Renewable Energy Act of 2008.
In its endorsement, the DOE said Shell should also comply with the policies of relevant government agencies and rules and regulations of the Energy Regulatory Commission (ERC) pertaining to retail competition and open access (RCOA) and WESM.
Shell should also secure necessary permits and licenses from the ERC and comply with competition rules promulgated by the power regulator and the Philippine Competition Commission (PCC).
With such backing from the DOE, Shell expects SEC to approve its amended Articles of Incorporation—which will allow the company to sell excess electricity through WESM—by June 15.
Last April, Shell’s board has approved to expand its secondary purpose to include sale of excess electricity through WESM as an additional source of revenue.
Currently, Shell operates a refinery in Tabangao, Batangas that produces its own electric power through turbines which are fueled mainly by natural gas. It said its self-generation of electricity is covered by a Certificate of Compliance issued by the Energy Regulatory Commission (ERC).
Shell president and CEO Cesar Romero said the firm will do some operational adjustments in the refinery. “By just making these adjustments, it will allow us to sell excess power to the grid,” he said.
However, selling of excess power will not become a major leg in its operations in the country and will remain with fuel production and marketing.
“We see that there is an opportunity because of the equipment we have but our core business continues to be our highly profitable market and business. As to any business operations, if there’s any opportunity to make some extra margin for the refinery, then we will continue to do so,” Romero said.
In the country, Shell’s business mainly involves the production of fuel through its Tabangao refinery in Batangas, which produces 110,000 barrels of a full-range of products compliant with global Euro 4 fuel standards per day.
In 2003, Shell started bitumen production with a P80-million bitumen import, storage and distribution facility in Villanueva, Misamis Oriental.
Bitumen is one kind of residue from oil that is being used as a component for making asphalts.
In 2016, Shell is investing $13 million to upgrade its Tabangao refinery to raise bitumen production to take advantage of the government’s aggressive infrastructure plans.