MANILA Electric Co. (Meralco) is finalizing if it will push through with the construction of its 1,200 megawatts (MW) Atimonan One Energy coal power plant and initially sell the capacity in the spot market, as the Energy Regulatory Commission (ERC) has yet to act on the project’s power supply agreement (PSA) application.
Manuel Pangilinan, Meralco chairman, noted the need for more power; plants especially after the “Luzon power grid’s yellow alert level last week as power reserves level dropped.
“Maybe we’ll check the possibility while we are awaiting our application with the ERC. I think it has been discussed internally, whether we should proceed already. We’re anticipating this situation that supply is quite tight. Hopefully, in the next few months (we’ll decide) whether to proceed independent of our PSA,” Pangilinan said.
Construction of power projects by Meralco subsidiary Meralco PowerGen Corp. (MGen), including the Atimonan coal plant in Quezon province, was stalled as the company waits for the approval of the PSA for the project to sell its capacity for the use of Meralco customers.
Meanwhile, Rogelio Singson, MGen president and chief executive officer, said the company is hopeful the project will be pursued as it utilized the highest form of coal plant technology and already had an engineering, procurement and construction (EPC) contractor.
Singson said the delay in the construction has raised the EPC cost which in turn affects the entire project cost, prompting the company to talk with the banks that will finance it.
“We continue to engage with the banks. We continue to show our commitment to the project and keep negotiations running with seven commercial banks,” he said.
The Atimonan coal project was considered by the Department of Energy as an energy project of national significance, which eases its permitting requirements in order to be completed in a timely manner. Despite this, it is still awaiting PSA approval from the ERC.
The company has been keen on securing the regulatory body’s approval as selling output in the spot market would yield a power plant with unpredictable revenue stream, compared to those under PSAs whose power cost is at a fixed rate for several years.
Aside from the Atimonan project, other projects by MGen with pending PSAs at the ERC are 600 MW from Redondo Peninsula Energy, 400 MW from St. Raphael Power Generation Corp., 528 MW from Central Luzon Premiere Power Corp., 528 MW from Mariveles Power Generation Corp., 70 MW from Panay Energy Development Corp. and 600 MW from Global Luzon Energy Development Corp.