Olongapo SubicBay BatangGapo Newscenter

Sunday, October 30, 2005

Subic Freeport locators to get P.20/kWh rate cut

By MYRNA M. VELASCO, Manila Bulletin

Employing various strategies, including a renegotiated power supply contract, the Subic EnerZone Corporation (SEZ) is now able to offer electricity rates to business locators in the freeport by a rate that is P1.20 per kilowatt hour (kWh) cheaper than what is being normally offered for other customers in the Luzon grid.

"With the reduction of our distribution charge of 40 centavos per our DMSA (distribution management services agreement), the reduction of systems losses, and the renegotiation of our power supply, we have effectively reduced electricity prices by P1.20 per kwh," announced Erramon Aboitiz, SEZ chairman and chief operating officer of Aboitiz Equity Ventures.

SEZ, which now serves as the electric service provider within the jurisdiction of the Subic Bay Metropolitan Authority (SBMA), is a consortium composed of AEV, Davao Light & Power Company (DLPC), Mirant Philippines and San Fernando Electric Light & Power Company.

Company officials disclosed that the modified power supply agreement concluded with National Power Corporation and Mirant was able to reduce their buying price of electricity by about P0.66 per kWh, made effective starting September 26 this year.

Aboitiz assured that this would be another layer of cost softening that they would be able to pass on to their customers, primarily within the freeport zone.

To further improve the reliability and stability of power sold within Subic, he further noted that the company agreed to purchase not only all of subtransmission lines of the National Transmission Corporation (TransCo) within the area, but also its 100-megawatt substation.

The other area of improvement reported by the company that will also bear positive impact on consumers was the significant reduction in its system loss to 6.86-percent; which will redound to a rate cut of 14.5 centavos that will be flowed through to ratepayers.

SEZ indicated that it had inherited a system loss average of 15-percent from the SBMA Utility Department when it took over the power distribution system in October 2003; but due to some reliability improvement measures adopted, this is now down to a level that is even beyond compliance to what is mandated under the Electricity Pilferage Law.

When it took over in 2003, the utility firm committed to invest P350 million over 5 years to improve Subic?s power distribution system; and to this date, SEZ has so far invested P200 million with plans of investing another P50 million by the first quarter of 2006.

"In two years, after a major rehabilitation program and the installation of new systems and equipment, SEZ has lowered systems loss by almost 55percent," Aboitiz stressed.


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