Metro Manila (CNN Philippines, December 29) — San Miguel Corp. (SMC), through its power generation unit San Miguel Global Power (SMGP), will provide assistance to debt-saddled Albay Electric Cooperative (ALECO) through a 12-month emergency power supply agreement (EPSA).
“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,” SMC President and Chief Executive Officer Ramon Ang said in a statement. “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.”
SMC, ALECO and National Electrification Administration (NEA) signed the agreement on Dec. 29.
NEA has been ensuring continuous energy supply in the cooperative’s franchise area in a fiduciary capacity as allowed under its charter.
It sought assistance from SMC to prevent ALECO’s possible disconnection from the grid for failing to secure emergency power supply contracts with other firms due to credit issues.
One of ALECO’s pending legal issues is with another SMGP firm, Albay Power Energy Corp., which includes unpaid claims and advances amounting to ₱5 billion from an earlier terminated concession agreement.
Earlier, the Independent Electricity Market Operator of the Philippines (IEMOP) also expressed concerns over recent massive power purchases made by ALECO.
Following a series of discussions, SMC through its subsidiary Masinloc Power Partners Co. Ltd (MPPCL), owner and operator of the 1,000-megawatt Masinloc Power Plant, agreed to supply the power requirements.
“This would enable ALECO to prevent any further credit concerns with IEMOP, which could compromise energy security in the area,” SMC noted.
Aside from this, SMGP noted that the applicable tariff rate under the agreement is competitively priced based on the prevailing conditions in the fuel commodities markets and the credit standing of ALECO.
SMGP is also providing consumers protection against fuel price risks by capping its monthly tariff rates to ₱10 kilowatt per hour for the first half of the 12-month supply term to be followed by further reduction in the monthly tariff rates for the remaining months.
The EPSA is subject to ERC approval.
NEA Administrator Antonio Mariano Almeda expressed gratitude for SMC’s assistance, while Ang assured SMGP’s full commitment to provide the energy requirements of ALECO’s customers.
