Meralco plans joint venture with San Miguel, Aboitiz group

MANILA, Philippines—Manila Electric Co., the country’s biggest power distributor, is keen on forming possible partnerships with power giants San Miguel Corp. and Aboitiz Power Corp. to help build its planned power portfolio of more than 1,500 megawatts.

Manuel V. Pangilinan, president and chief executive officer of Meralco, said the two companies were among the local and foreign groups that the distribution utility planned to tap for its power projects over the next four years.

Apart from the two power giants, Team Energy, a venture between Marubeni and Tokyo Electric and Power Co., and the Consunji-led DMCI Holdings Inc. were among those that have earlier approached Meralco for possible partnerships.

Discussions with DMCI were still ongoing, Pangilinan said.

Meralco expects to spend as much as $2.3 billion (about P103 billion) to complete its 1,500-MW power generation portfolio between now and 2016.

Pangilinan noted that Meralco has started taking “affirmative steps to get our first power generation project on stream and move forward to develop a portfolio of new generating baseload, mid-merit and peaking plants.”

“We are looking at various fuel sources to power our generation projects, cognizant of the growing concern for our environment, the demand curve and the continuing call for lower generation charge,” he added.

Meralco’s initial foray in the power generation sector is a 150-MW peaking power plant in Calamba, Laguna, which is expected to cost anywhere between P6.5 billion and P7 billion.

According to Pangilinan, the Laguna power facility would run on jet fuel initially but could be converted later on to run on natural gas—as soon as the necessary infrastructure has been completed and the supply of natural gas becomes more accessible.

“It’s still on track with the 2012 target. It’s a peaking plant and is relatively easier to install in our chosen site in Calamba, Laguna,” Pangilinan said.

Once it starts commercial operations within the first quarter of 2012, Pangilinan said Meralco might be able to provide its customers with cheaper power compared with those being traded at the wholesale electricity spot market (WESM).

Meralco sources its electricity requirements from the WESM, state-run National Power Corp. and its independent power producers, namely the Lopez-led First Gas Corp. (through the 1,000-MW Sta. Rita and 500-MW San Lorenzo natural gas facilities) and Quezon Power Philippines Ltd.