Meralco revises generation plan, targets 1,500 MW

Firming up its power generation plans, Manila Electric Co. (Meralco) — the country’s largest power distributor — will invest in around 1,500 megawatts (MW) of generating capacity, company president and CEO Manuel Pangilinan said over the weekend. Meralco is conducting a study on its planned power generation, Pangilinan said. “And the study has to be affirmed on a project basis." “The whole study engages us in a number of possible sites and possible alternatives and partners. There’s many or a number of possible sites, partner, type of plant, and capacity," Pangilinan told reporters. Meralco will finance the projects through a combination of debt and equity, he said. “The equity component will be determined by the possibility that we’ll have partners. We’re open to that in order to spread the risks of getting into power generation," Pangilinan said, noting that Meralco has been out of the power generation business since 1979. Meralco will control 51 percent of the power generation projects that will be put up in partnership with other companies, he said. The firm is willing to make business deals with its “technical partners, operating partners, and equity partners — be it shareholder or not — as long as the deals would benefit the company," Pangilinan said. Pangilinan pointed out that Meralco is venturing into power generation because it wants to deliver reliable electricity at a lower cost to consumers. “We have a target generation cost that we want to achieve. We get beaten up whenever electricity charges go up. Part of the goal of Meralco is that we get to manage the overall electricity rate including the generation cost. Right now, we’re an order taker, or whatever the [generation companies] tell us, we respond to it," he explained. Meralco — with a consumer base of over 4.8 million — is looking at a generation cost of less than P5 per kilowatt hour for the new power generation facilities, Pangilinan said. He also said the company is looking at the possibility of putting up coal generation facilities. “We could build more than 1,500 megawatts [of generating capacity], but we’re just being conservative. It’s a third of our requirement. The law limits us to 50 percent of what we sell is what we can own," Pangilinan said. Should the plan push through, the first power unit would be online between 2012 and 2013, he said. Meralco earlier looked at a generating capacity of 600 MW in the next three years but revised it to 1,500 MW over fives. Meralco revised its targets due to the longer time it takes to construct and connect a new power plant to the grid, as well as expectations of a robust Philippine economy under the Aquino administration, Pangilinan said. — JE/VS, GMANews.TV