ALECO secures power from SMC
AUNIT of San Miguel Global Power (SMGP) will supply electricity to debt-ridden Albay Electric Cooperative (ALECO), the power generation arm of San Miguel Corp. (SMC) said.
Masinloc Power Partners Co. Ltd (MPPCL), owner and operator of the 1,000-MW Masinloc Power Plant, agreed to supply ALECO’S full power requirements for 12 months. this after SMC, national Electrification Administration (NEA), and ALECO signed the emergency power supply agreement (EPSA).
NEA sought the help of SMC President Ramon S. Ang to prevent ALECO’S imminent disconnection from the grid, following a failure to secure emergency power supply contracts with other firms due to the cooperative’s credit issues.
ALECO has pending legal issues with another SMGP firm, Albay Power Energy Corp. (APEC), which includes unpaid claims and advances amounting to P5 billion, related to their terminated concession agreement. Following the termination, ALECO sought the intervention of the NEA, which took over the distribution business of ALECO in a fiduciary capacity as provided for under its charter.
NEA Administrator Antonio Mariano Almeda expressed gratitude to SMC for agreeing to come to ALECO’S rescue, by committing to provide it power supply. He also cited the Department of Energy (DOE) for its support for the agreement.
“Since we became involved, our goal was always to ensure continuous power supply to ALECO customers, despite the cooperative’s troubles. While no emergency power contracts could be finalized with the other generation firms, SMC and RSA did not hesitate to help when we approached them,” Almeda said. “We will continue to work with all stakeholders to help make this supply agreement work for the benefit of consumers.”
Earlier, the independent Electricity Market Operator of the Philippines (IEMOP), independent market operator of the Wholesale Electricity Spot Market (WESM), had raised concerns over the recent massive power purchases made by ALECO.
IEMOP was seeking credit support for ALECO’S purchases, in view of its historical credit standing.
the EPSA would enable ALECO to prevent any further credit concerns with IEMOP, which could compromise energy security in the area.
“this power supply agreement is not for-profit, and is primarily in consideration of the welfare of the people of Albay, who would have otherwise been disconnected from the grid. While SMGP has pending legal issues with ALECO which we are pursuing, we are still very much concerned about the welfare of the people of Albay,” said Ang.
Ang has given the NEA and the DOE full assurance of SMGP’S support in providing the entire power requirements of those in ALECO’S franchise area.
Apart from assuring continuous electricity supply, SMGP also said that the applicable tariff rate under the power supply agreement is competitively priced, based on the prevailing conditions in the fuel commodities markets and the credit standing of ALECO.
in the interest of ALECO consumers, SMGP went further by providing consumer protection against fuel price risks by capping its monthly tariff rates at P10/kwh for the first half of the 12-month supply term, while allowing further reduction in the monthly tariff rates for the remainder of the term.
the EPSA is subject to the approval of the Energy Regulatory Commission, which will be secured by the parties, with the full support of NEA and the DOE.