“We have already signed. We’re just waiting for the ERC (Energy Regulatory Commission) approval,” SMPC Chairman and CEO Isidro A. Consunji told reporters on the sidelines of parent DMCI Holdings, Inc. annual stockholders’ meeting at the Manila Polo Club in Makati City.
He said the resulting stake for the partners would be 40% each for SMPC and MGen, and 20% for the new entrant. MGen parent, distribution utility Manila Electric Co. (Meralco), is awaiting ERC’s approval of its application for a power supply agreement covering the or the new plant.
Victor A. Consunji, SMPC president and chief operating officer, said the project, together with upgrades to the company’s existing plants, would “keep our hands full” before another project comes along.
“Actually, what was approved was 3 by 350,” he said, referring to three units each with 350 MW, bringing the total projected capacity to 1,050 MW. “What was closed was the 2 by 350.”
He said the power plant is under St. Raphael Power Generation Corp., a wholly owned SMPC subsidiary created in 2013 to engage in the power generation business. An environmental compliance certificate had already been issued by the Department of Environment and Natural Resources, he said.
“There was no guidance yet if we will undertake it ourselves,” he said of the third unit.
SMPC generates revenues through the sale of sub-bituminous coal sourced from Semirara Island in Caluya, Antique. One of its seven wholly owned power subsidiary, Sem-Calaca Power Corp. (SCPC), supplies power under various bilateral contracts. Its excess generated power is sold to the Wholesale Electricity Spot Market (WESM), the venue for trading electricity in the country.
The Semirara president said unit one of SCPC will have an outage in December for an upgrade.
“We hope that the upgrade on the boilers will give us an initial increase of 50 MW — from 180 MW right now to 230 or 240 MW, so it’s between 50-60 MW using the same fuel quality. That will be by the middle of February next year,” he said. “We will do some modelling [on] how to upgrade it again … to go around 280 MW.”
As for unit two, Mr. Consunji said there will be no upgrade until the end of 2017, although it will be “very small.”
“For unit one, majority [of parts and equipment for the upgrade] is still coming,” he said.
SCPC owns the Calaca power plants in Batangas, on which Sem-Calaca Industrial Park Development, Inc. plans to develop certain areas into an economic zone to cater to industries that are near the plants. The company’s total contracted energy in 2015 was at 491.4 MW, of which 420 MW is for Meralco.
Another subsidiary, Southwest Luzon Power Generation Corp., is behind the two-unit coal-fired thermal power plant each with a 150-MW capacity and using circulating fluidized bed technology in an area adjacent to the Calaca power plants.
“We’re doing the commissioning, and we’re happy that… we started with 140 MW [and] we are now reaching 150 MW, which is the required power,” Mr. Consunji said.
“Between now and November we will call on the ERC again,” he said, referring to the regulator’s granting of a certification of full commercial operation for Southwest Luzon, which houses units three and four power plants.
Southwest Luzon had already contributed to first-half results, which Mr. Consunji said could translate in a 25% increase in revenues by year-end.
OUTLOOK FOR OTHER UNITS
For the other business segments, Mr. Consunji, who is also the president and chairman of DMCI, said Maynilad Water Holding Co., Inc.’s finances would be dragged down by the end of its income tax holiday as well as the unresolved arbitration case, which is estimated to have resulted in around P5 billion in lost revenues.
For the housing segment, DMCI expects a 10% drop, mainly because of the accounting method of booking income is based on finished projects and not by percentage of completion.
“Homes will suffer in net income although sales will go up,” he said, adding that the launch of new projects will continue to increase.
“As long as interest rates are low, and people have jobs, [they would] still want to own their houses,” he said.
Mr. Consunji is bullish on the administration’s focus towards more infrastructure projects, which could have a positive result for property development.
SMPC is also expected to have better results this year. Mr. Consunji said coal production is targeted to hit 10 million metric tons (MT) this year after reaching 6 million MT in the first half. The lower output in the second half is due to the start of the rainy season.
DMCI reported a consolidated net income of P12.3 billion in 2015, up 20% from the previous year as all its investments posted strong performance.
Mr. Consunji said DMCI’s net income this year would be “about the same” as the previous year, although in the first quarter it was tracking a little higher than year-ago levels.
On Wednesday, shares in DMCI closed lower by 0.46% to P13 each, while those of SMPC was up 0.25% to P119.50 apiece.