Meralco shelves Laguna project

Manila Electric Co. (Meralco), the country’s biggest power distributor, has decided to put on hold its plan to put up an aero jet-fueled power plant in Calamba, Laguna, which would have cost $150 million to $300 million, due to the volatility of the prices of petroleum products.

In a phone interview, Meralco president and CEO Oscar S. Reyes said the proposed Calamba facility, which was earlier targeted to generate between 150 megawatts and 300 MW, was intended to be a “peaking facility” and would be using diesel.

“Given the high price of diesel, we are looking at an alternative fuel—possibly natural gas—but that means we have to wait for the availability of fuel (natural gas) and the related infrastructure. So now, it is on hold, as we are still exploring further the availability of the right fuel and the right infrastructure,” Reyes told the Inquirer.

The construction of the Calamba peaking facility, once this pushes through, will be undertaken by Calamba Aero Power Corp., a wholly owned subsidiary of Meralco Powergen Corp. (MPG), which in turn is a subsidiary of Meralco.

According to Reyes, the company has the capability of bringing in this facility after or simultaneously with the $1.28-billion 600-megawatt coal-fired power project in Subic, which Meralco is undertaking with partners Aboitiz Power Corp. (through subsidiary Therma Power Inc.) and Taiwan Cogeneration International Corp. (Philippine branch).

Reyes said the Calamba facility could be put in place in a short period. “It will also require a shorter lead time to install—either 150 MW or 300 MW,” he said, adding that the current target was to have the Calamba power plant start operating either in late 2014 or by 2015.

The Calamba and Subic facilities formed part of the planned power generation portfolio of Meralco, which is targeting to invest as much as $2.3 billion (roughly P103 billion) in putting up several power plants that could generate some 1,500 MW between now and 2016.

By having more facilities, Meralco believes it will be able to help make electricity rates more competitive.

Meralco chairman Manuel V. Pangilinan earlier said the government must encourage power-generation companies to put up new facilities that would generate the much-needed additional electricity, whether by “incentive or compulsion,” to help ease the country’s tight supply.

This, Pangilinan earlier stressed, would help meet the increasing demand for electricity.