SMC unit to power Central Luzon co-ops

SMC Global Power Holdings Corp., the power arm of conglomerate San Miguel Corp., has committed to supply power to Central Luzon-based electricity cooperatives.

“We’ve signed with Cleca,” SMC Global Power chair and CEO Ramon S. Ang said, referring to the Central Luzon Electric Cooperatives Association Inc.

Cleca is composed of 12 electricity cooperatives serving various areas in Central Luzon.

Ang said the deal was for 300 megawatts (MW) of power over a 20-year period from 2018 to 2037.

The agreement set a benchmark rate of P3.20 per kilowatt-hour (kWh) of power supplied, Ang said. Cleca used to buy electricity for P8 to P9 per kWh.

“This will be the benchmark now, everyone that will sell electricity, even Meralco (Manila Electric Co.), the Energy Regulatory Commission (ERC) will insist on P3.20 per kWh,” he said.

He also said the lower electricity rates would also encourage investments in the areas covered.

Ang said SMC would get the power supply from its 300-MW Limay power plant in Bataan, managed by subsidiary SMC Global Power Holdings Corp.

The 12 Cleca members are Aurora Electric Cooperative, Inc., Nueva Ecija I Electric Cooperative, Nueva Ecija II Area 1 Electric Cooperative, Nueva Ecija II Area 2 Electric Cooperative, Pampanga I Electric Cooperative, Pampanga II Electric Cooperative, Pampanga III Electric Cooperative, Pampanga Rural Electric Service Cooperative, Tarlac I Electric Cooperative, Tarlac II Electric Cooperative, Zambales I Electric Cooperative and Zambales II Electric Cooperative.

Cleca has an existing 300-MW, 20-year supply contract (from June 2014) with GN Power Ltd, Co. at a rate of P3.70 per kWh.

In 2013, Cleca was formed with 12 electric cooperatives in Central Luzon aggregating their total power demand of 300 MW. They auctioned it off and contracted the winning supplier for 20 years starting 2019. The electric cooperatives banded together as the Central Luzon Electric Cooperatives Association – First Luzon Aggregation Group (ClecaFlag).

The Philippine Chamber of Commerce and Industry has lauded the aggregation of small electricity cooperatives.

Alfredo M. Yao, president of the country’s biggest organization, said the day when small electric cooperatives will gain the upperhand in negotiating with large power generating companies for lower power rates was near.

Former Energy Secretary Jericho L. Petilla, who witnessed the signing of the long-term power supply contract between ClecaFlag and GN Power Ltd. Co., said demand aggregation would be an effective tool for small cooperatives in the future.