San Miguel power unit bags new supply contracts

MANILA, Philippines – San Miguel Energy Corp. (SMEC), the power generation arm of San Miguel Corp. (SMC), has been awarded two new power supply contracts.

Based on Energy Regulatory Commission (ERC) documents, SMEC has been chosen by Ilocos Norte Electric Cooperative, Inc. (INEC) and Sorsogon II Electric Cooperative, Inc. (SORECO) to provide power.

“Upon evaluation of the offers of various interested suppliers, SMEC’s proposal was considered the most favorable to INEC and its consumer members,” INEC said.

SMEC will supply INEC’s power requirements up to the end of 2011 at P4.60 per kilowatt-hour. This is around P0.01 per kilowatt hour lower than state-owned National Power Corp.’s (Napocor) rates.

INEC is the franchise holder to operate light and power service in various municipalities and cities in Ilocos Norte, including Laoag and Batac.

On the other hand, SORECO II initially wanted to contract IN2Power Inc., but was unable to reach an agreement due to limited supply as a result of the El Nino weather phenomenon that affected the operations of its power plant.

“With these developments, after the determination of SORECO II that the offer of SMEC was advantageous to its consumers, the contract was eventually awarded to the latter,” the utility said.

SORECO II distributes electricity to the Sorsogon city and various municipalities in the province of Sorsogon.

Under the supply contract entered into by SORECO II and SMEC, the latter shall supply the distributor’s power requirements up to 2012 at a rate of P5.19 per kilowatt-hour, higher by 92 centavos per kWh than Napocor’s rates.

INEC and SORECO II’s deals with SMEC would include a monthly cost adjustment mechanism to reflect movements in the latter’s power generation cost, particularly in the prices of coal, and foreign currency exchange fluctuations.

However, these supply contracts are not yet approved by the ERC.

Original article.

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