SMC Global Power Holdings Corp.’s subsidiary will supply the power requirements of Albay Electric Cooperative (Aleco) for one year, the company announced on Thursday.
“This power supply agreement is primarily in consideration of the welfare of the people of Albay, who would have otherwise been disconnected from the grid,” San Miguel Corp. (SMC) President Ramon S. Ang said in a media release.
SMC’s power arm said its subsidiary Masinloc Power Partners Co. Ltd. had agreed to supply Aleco’s full power requirements.
According to Mr. Ang, the supply deal came after the National Electrification Administration (NEA) sought the help of SMC to prevent Aleco’s possible disconnection from the grid after it failed to secure an emergency power supply agreement (EPSA) due to some credit issues.
Masinloc Power Partners is the owner and operator of the 1,000-megawatt Masinloc power plant.
SMC Global Power said that it had signed an EPSA with NEA and Aleco on Thursday. The contract awaits the approval of the Energy Regulatory Commission (ERC).
The power company also said that it would provide consumer protection against the volatility of fuel prices by setting the limit to its monthly rates at P10 per kilowatt-hour (kWh) for six months of the one-year supply term. It will also allow a reduction in the monthly tariff rate for the rest of the supply term.
NEA Administrator Antonio Mariano C. Almeda said the agreement among the parties had the full support of the Department of Energy.
“We will continue to work with all stakeholders to help make this supply agreement work for the benefit of consumers,” he added.
To recall, Aleco has a pending legal issue with Albay Power Energy Corp. (APEC), another unit of SMC Global Power, related to a terminated concession agreement. Aleco then asked NEA to take over its distribution business.
In October, NEA announced that it was set to exercise supervisory power over the operation of Aleco, which is a power distributor in the Bicol province.
“Apart from ensuring continuous electricity supply, [SMC Global Power] also said that the applicable tariff rate under the power supply agreement is competitively priced, based on the prevailing conditions in the fuel commodities markets and the credit standing of Aleco,” the SMC unit said. — Ashley Erika O. Jose