Metro Manila (CNN Philippines, August 1) – The power unit of San Miguel Corporation (SMC) is seeking a rate hike for the losses it sustained due to soaring global coal prices and unilateral natural gas supply restrictions from the Malampaya gas field.
In a statement released on Monday, the SMC Global Power Holdings Corp. (SMCGP) sought for a temporary and partial cost recovery relief for the losses it recorded from January to May 2022 amounting to ₱5.2 billion.
SMCGP requested from the Energy Regulatory Commission a rate increase of ₱0.80 per kilowatt hour (from ₱4.3 to ₱5.1/kwh) for its 670 megawatts (MW) of contracted baseload capacity from the Ilijan Plant, and an average of ₱4.0/kwh (from ₱4.3 to ₱8.3/kwh) for the 330 MW contracted baseload capacity from the Sual Plant.
SMC’s power unit explained its Sual Coal and Ilijan Natural Gas power facilities have incurred combined losses of ₱15 billion from 2021 to present because of the current global situation.
The power firm added coal prices in the global commodities markets have already breached the US$400/metric ton (MT) level, way beyond the US$60-US$65/MT price range contemplated at the time of the execution of its power supply agreements with the Manila Electric Company (Meralco) in 2019.
“Unfortunately, those prices have increased by over 500% since then. We are not asking to recover all our losses, neither are we asking for a permanent increase. We want to continue supplying Meralco with baseload power,” said SMC president and chief executive officer Ramon Ang.
The power rate increase requested by SMCGP will allow the power generation facilities to continue sourcing the necessary fuel and allow it to viably operate and supply power.
“What we are asking for is just a temporary and equitable relief, to allow the power facilities to survive this difficult period and continue supplying power to Meralco,” Ang added.
Ang also said the power firm decided to absorb more than ₱10 billion in losses last year, which it did not file a claim for, after coal prices averaged $176/MT in the second half from just $99/MT in the first half of 2021.
“SMC remains focused on maximizing all existing power assets in our portfolio to continue providing for the increasing needs of the country during this critical time. These include our existing renewable capacities and new Battery Energy Storage System facilities, which help limit power wastage and make variable renewable sources more viable,” Ang said on SMCGP’s commitment to offer clean energy in the future.
