Officials of the three companies said in a briefing here that the power project, to be undertaken by a vehicle company called Redondo Peninsula Energy Inc. (RP Energy), would help lower electricity rates within Subic and shore up supply in the Luzon grid in three years’ time.
The construction of the coal-fed facility, which will generate 120 job opportunities, will be put up in two phases, with the first 300-MW unit expected to start operations by 2014. RP Energy expects to sell part of the plant’s output to Meralco, the country’s biggest power distributor, although this has yet to be negotiated by the parties and approved by the Energy Regulatory Commission.
In the same briefing, Energy Secretary Jose Rene D. Almendras commented that he expected RP Energy to complete the construction of the plant on time since this was being put up within the freeport. He said the project would not be delayed by local or provincial government intervention.
Almendras admitted that coal would continue to play major role in the country’s energy mix until the government could find better and relatively cheaper alternative sources. Coal facilities are deemed critical to ensure the country’s energy supply.
Controlling shareholder
Also on Friday, Meralco formalized its entry in RP Energy—through subsidiary Meralco PowerGen Corp.—with the signing of a shareholders’ agreement.
Under the agreement, Meralco PowerGen becomes the controlling shareholder of RP Energy with 50 percent plus two shares, while APC, through subsidiary Therma Power Inc., and Taiwan Cogeneration will own the remaining shares equally.
“Meralco’s entry into power generation is part of an overall strategy to ensure that our customers obtain efficient, reliable and adequate electricity at competitive rates. This investment is timely, given growing concerns about the availability of sufficient power supply in the coming years,” added Meralco president and CEO Manuel V. Pangilinan.
Meralco is expected to finance half of the 30-percent equity portion of the $1.28-billion total project cost. The 70 percent will come from project financing.
Signing
Present during the signing Friday were banks that expressed interest in funding the facility—RCBC, First Metro Investment Corp., BDO Capital, Bank of the Philippines Islands and Philippine National Bank.
“Today, we officially seal a partnership that aims to benefit not only the Subic Bay Metropolitan Authority and its power consumers but the community at large. We believe that proper infrastructure and the required supporting services, which include competitive and reliable power, are prerequisites for growth,” Aboitiz said in a speech.
“No one can deny that you have the infrastructure in Subic. Our goal is to enhance what you have today by improving and making available to you and future locators reasonably and competitively priced world class power,” Aboitiz further said.
Meralco chief operating officer Oscar Reyes said the power distributor was willing to buy all the electricity to be generated from the 600-MW coal facility. However, there were several power distribution utilities that have expressed interest to source power from RP Energy.