The planned $2.3-billion power generation portfolio of Manila Electric Co., the country’s biggest power distributor, will not be derailed even if the utility is allowed to collect much lower distribution, supply and metering charges over the next four years.
Meralco chief operating officer Oscar S. Reyes explained that the power plant projects would be implemented through a separate entity—Meralco PowerGen Corp. (MPG)—a wholly owned subsidiary that will develop highly cost-competitive and reliable power plants that can generate some 1,500 megawatts in five to six years’ time.
“The [power plant projects] are distinct and separate from the distribution utility,” Reyes noted.
MPG, Meralco’s vehicle for re-entry in the power generation business, is in the process of developing a portfolio of baseload, mid-merit and peaking plants potentially using clean coal, liquefied natural gas or aeroderivative gas turbine technologies. These power facilities will enable the distribution utility to provide adequate, reliable and affordable electricity to its customers.
According to Reyes, Meralco is prepared to tap the local debt market should there be a need for funding for these power projects.
The company continues to look for facilities that can be made available to it at attractive terms, he said.
“We have had regular dialogues with the financial markets,” Reyes added.
Meralco senior vice president and chief finance officer Betty C. Siy-Yap had said that the company was planning to raise as much as P9 billion to pay for the 30-percent equity portion of a proposed 300-megawatt coal-fired plant to be constructed north of Manila. The remaining 70 percent will be funded through project financing.