Plant's construction seen lowering power costs in Subic

Ronnel W. Domingo - Inquirer

THE CONSTRUCTION OF A 300-megawatt coal-fired power plant in Subic would help push power rates in the freeport lower and nearer to the regional price benchmark that are attractive to investors.

Armand C. Arreza, administrator of the Subic Bay Metropolitan Authority, said electricity costs would also be lowered through a petition for a 35-centavo-per-kWh reduction in rate now pending with the Energy Regulatory Commission.

Arreza said the power rate in Subic could be slashed to as low as P5 a kWh, which would make it the cheapest in the country.

"But that would still be about 10 US cents, higher than the competitive benchmark of 7 cents for the region," Arreza said.

Taiwan Cogeneration Corp.'s planned facility would mainly serve Subic locators--especially the Taiwanese firms at the Subic Bay Industrial Park--but it would also supply power to the grid.

SBMA earlier announced the signing of a memorandum of understanding with Taiwan Cogen covering the construction of the $300-million power plant.

But Arreza said the entire project could cost about $400 million.

"We need at least 180 MW of additional capacity," Arreza said. "We also need to lower power rates considerably because foreign investors are passing up on Subic in favor of other locations in the region with cheaper energy costs."

The official cited as examples four optical disc manufacturing companies based in Taiwan, three of which ended up either in Thailand or Vietnam, where electricity costs 5 cents a kWh. The remaining firm is now having second thoughts about Subic.

Under the MOU that was signed last February, Taiwan Cogen would prepare a study on the power supply needs of about a thousand companies and establishments operating at the freeport zone.