RP Energy assures add’l benefits to Zambales

SUBIC BAY FREEPORT – Redondo Peninsula Energy Inc. (RP Energy), the proponent of a planned $1.2-billion coalfired power plant in Zambales, is ironing out plans to increase the host community’s benefit in the project.

The consortium is reviewing tax laws to clarify the need to pay real property taxes in the Subic Bay Freeport Zone as deemed necessary by local officials during a public consultation yesterday.

“With regards to real property tax, we have sought advice and are being advised now how it will be handled and in the next several weeks that will be clear,” said RP Energy president Aaron Domingo.

Domingo said the consortium is seeking the advice of a private accounting firm to clarify the law.

“If you are selling inside Subic or exporting, you are not going to be subject to real property taxes. But majority of the power will be sold outside and for that reason we have conflicting tax policies,” Domingo said.

Meralco Powergen Corp. is building the 600-megawatt (MW) coal-fired power plant in the freeport zone in partnership with Aboitiz Power Corp. and the local unit of Taiwan Cogeneration International Corp. It is targeted to start commercial operations in 2015, increasing available electricity in the Luzon grid.

However, Zambales vice-governor Ramon Lacbain said he is against the power plant because it is free from real property tax.

In contrast, the 600-MW Masinloc Power coal-fired plant of US firm AES Corp. pays the Zambales province P300 million in real property tax annually, Lacbain said during the consultation.

RP Energy, for its part, said the project will bring numerous advantages to the host community.

“One is the direct benefit, which include wharfage fees and the use of the facility as we go. Those provide revenue for Subic,” Domingo said.

In the public consultation, stakeholders like local officials and residents raised their concerns on the project’s job generation, price of electricity, effects on the marine ecosystem, contingency planning in cases of emergencies like earthquakes and the business expertise of RP Energy.

The consultation is a requirement of the Department of Environment and Natural Resources prior to its issuance of an environmental compliance certificate (ECC) to the project.

“We assured the community that we are one with them in preserving Subic’s rich environment as we will employ the most modern technologies to ensure negligible emissions,” said Meralco Powergen development analyst David Evangelista.

RP Energy already has an ECC for the first phase of the power plant that will have a capacity of 300 MW.

Relocation is not an option for the consortium as it is crucial in meeting the growing energy demand in the next few years.

“The country needs the power in the next three years...to move [to other locations] will remove the power plant that the country requires,” Domingo said.

Specifically, the freeport zone is ideal for the project as it can handle the big ships that will supply coal while power produced can easily be connected to the Luzon grid, Domingo said.

The port area will allow easy transfer of equipment, he added.

RP Energy expects the ECC to be issued in September or October this year.

“We are confident we will get the ECC because we will comply [with regulatory requirements],” Domingo said, adding that pushing through with the entire 600 MW capacity will result in lower costs and more competitive power prices.

Last week, Energy Secretary Jose Rene Almendras said the power plant will assure that there will be no power outages or spikes in electricity prices in the Luzon grid by 2015.