Power supply expansion
Monday, October 04, 2004
By MYRNA M. VELASCO
American firm Mirant (Philippines) Corporation announced yesterday it would pursue an aggressive $400 million expansion for the two of its existing power facilities in Luzon and supply-scant Cebu area that would raise its generating capacity by 50 percenty and add three percent to total national power supply.
These ventures would serve as expansion of its existing 700-megawatt Pagbilao power station for additional capacity of 350MWs and another 100MW for its Toledo power station in Cebu.
Being positioned as corporate vehicle to undertake such projects would be the Mirant Global Philippines Corporation, a joint subsidiary of Mirant Philippines and GBHI of the Metrobank Group; a partnership that was firmed up last year.
"These expansions which are in an advanced stages of development and subject to our obtaining all the needed clearances, should be operating in early 2008 in time to meet the projected capacity shortfalls in Luzon and Cebu," said Edgardo A. Bautista, president and chief executive officer of Mirant Philippines.
So far, these two projects were the first ones being firmed up for eventual implementation after the recent ruling of the Energy Regulatory Commission (ERC) setting some remedial measures on what was deemed as "artificially low" rates of state-owned National Power Corporation.
It would be noted that investors have long been looking for any positive signal that could happen in the industry before they can take off from the drawing board any of their planned new investments or expansions.
Meanwhile, Energy Secretary Vincent S. Perez sounded off that the planned expansion will help avert any power supply shortfall in the next few years.
"This announcement assure us that we can address the growing electricity requirements in Luzon and the Visayas particularly in the Cebu sub-grid," he stressed.
As early as last year, the energy chief has been calling on the private sector to help construct new power facilities given the fact that the national government does not have the resources to undertake new power projects.
"The Government is no longer in the business of putting up new power plants as stated in the EPIRA (Electric Power Industry Reform Act) except in emergency situations. Any Government resource for this undertaking will now be channeled to the delivery of other basic services to our people," the energy secretary further noted.
Perez likewise intimated that the planned projects just indicates strong confidence of the private sector on the on-going reforms in the power industry; pointing out that the planned expansion came in the heels of the recent ERC ruling that has somehow set the tone on bids to reflect true cost of electricity.
While several power companies showed keen interest to embark on new power projects, Perez noted that most of them also expressed concerns on the recovery of costs as the present generation rates imposed by the independent power producers are pegged on the charges of NPC.
posted by philpower @ 5:08 PM,
