DOE, SMPC pact to cut power rates in Mindoro

By Lenie Lectura – February 26, 2017

from Business Mirror

The Department of Energy (DOE) and the Consunji-led Semirara Mining and Power Corp. (SMPC) are set to sign a memorandum of agreement (MOA) aimed at bringing down the cost of generating electricity in Mindoro for as low as P2.50 per kilowatt-hour (kWh).

“The MOA is about to be signed soon,” Energy Secretary Alfonso G. Cusi said.

The agreement states that SMPC will build a 50-megawatt (MW) mine-mouth plant in Mindoro that could be ready in three years.

“The mine-mouth plant will supply power to Mindoro by cable. Our role in the MOA is on the permitting side. We have to agree on it because the project is envisioned to connect Mindoro, Marinduque and Romblon, among others,” Cusi said.

Electricity in these islands, Cusi explained, is powered by expensive diesel. “We have to develop these islands that use gasoline to provide power there. We have to find a solution consistent with our mandate to provide reliable and cheap power supply.”

The energy chief clarified, though, that a power-supply agreement between SMPC and electric cooperatives (ECs) would still have to undergo a competitive selection process (CSP) in order to provide the cheapest power rates possible to end-consumers. “It will definitely go through CSP,” he added.

Power from the mine mouth plant will be delivered to the ECs, which, in turn, will deliver electricity to the households.

SMPC Chairman Isidro Consunji earlier said it would cooperate with the DOE, following a request to build more power projects in off-grid areas.

“We’re working on building power plant in Semirara  for Mindoro,” Consunji said.

In November last year Cusi said he asked Consunji “if they can put up a bigger plant to serve Romblon, Marinduque and connect it with Mindoro.”

Based on a concept paper which, Cusi said, the DOE was involved with, a submarine cable will connect these islands so that power will reach these off-grid areas.

Mine-mouth power plants are usually built near a coal mine, where coal is excavated from the site and transported via conveyor belt.

SMPC’s profit last year reached P12.04 billion, up 42 percent from P8.47 billion a year ago.

Of the amount, P6.6 billion came from SMPC’s power business, while the remaining P5.4 billion was sourced from its coal segment.

In particular, Sem-Calaca Power Corp. recorded P2.9 billion and P3.7 billion from Southwest Luzon Power Generation Corp.