San Miguel Corp. said Sunday power unit San Miguel Global Power Corp. offered to make the entire capacity of its 1,200-megawatt Ilijan natural gas plant available to Manila Electric Co. for a fraction of its capital cost.
SMC said the move would help keep electricity prices as low as possible for consumers while ensuring a steady power supply in the coming months.
SMC president Ramon Ang said the offer, covering the full capacity of the Ilijan plant that historically accounted for 10 percent to 12 percent of Luzon’s net dependable capacity, would only cost Meralco a minimal P1 per kilowatt-hour in capital recovery fee, or half of its capital cost on the facility.
This means that the power costs for households from the facility would be much lower compared to prevailing prices from coal power generation.
Ang said SMCGP, through subsidiary South Premiere Power Corp., had initial discussions with Meralco, as both firms were committed to helping consumers weather rising commodity prices, including power.
“As we have said in the past, we will continue to look for ways to help make sure consumers will still have some protection from the effects of skyrocketing global fuel prices. This is one of the best and most direct ways we can show solidarity with our people in this time of crisis,” said Ang.
“Because of unforeseen global events such as the Russia-Ukraine war, fuel prices are at unprecedented highs, and supply is tight. We are in a crisis, and this is a shared burden by all Filipinos―power consumers, the power sector, government. By immediately foregoing returns, we continue to carry our share of the burden while getting just enough to make sure plant operations continue andremain sustainable,” he said.
Ang said to help address fuel constraints, SMCGP was also offering to help source the fuel for the Ilijan facility ―whether from its allocation of Malampaya gas or liquid fuel—which Meralco would pay for.
Ang said SMCGP was also willing to work with Meralco in using its 70 petajoules banked gas it acquired from Philippine National Oil Company at a cost much lower than the prevailing cost of coal power generation.
He said this would give Meralco the flexibility to manage power generation costs and ensure an adequate power supply.
Ang said the company also expected the completion of an LNG terminal facility it tolled by March 2023, according to most recent construction updates.
The company contracted the facility to receive, store and re-gasify commercial LNG, but pandemic restrictions and the Russia-Ukraine war delayed the project.
The Department of Energy earlier said it expected a power supply deficit in Luzon unless the Ilijan power plant was reactivated as part of the energy mix.