Subic Enerzone Corp. signed an agreement with San Miguel Energy Corp. for the latter to supply the electricity needs of the freeport for six months. SEZ will source from SMEC over 16 to 17 megawatts until September 2011 at a flat rate of P3.89 per kilowatt-hour subject to fuel and foreign currency exchange adjustments. The Energy Regulatory Commission (ERC) has already approved the two parties' agreement in a provisional decision released last month subject to some conditions. Prior to the supply deal, the SEZ sourced its electricity from state-owned National Power Corp. (Napocor). Most of the latter's generating plants in Luzon, however, have been privatized under the government's power sector reform and restructuring program.

AN ELECTRIC cooperative in the Cordillera region now has the option to directly source power from San Miguel Energy Corp.'s Sual coal-fired plant after regulators approved supply prices for transactions between the two firms. The Energy Regulatory Commission (ERC) approved an hourly basic charge for the energy supply agreement between San Miguel Energy and Kalinga- Apayao Electric Cooperative (Kaelco) for two years, with the fee due for peak hours pegged at PHP 6.3283 per kilowatt-hour (kWh). Thus, the cooperative may now be able to bypass transacting through the Wholesale Electricity Spot Market and contracting National Power Corp. Kaelco will be able to source as much as 1.8 megawatts (MW) of power from the 1,200-MW San Miguel Energy plant in Pangasinan.

San Miguel Corp. intends to divest as much as 49% stake in power-generation assets, President Ramon S. Ang said. San Miguel plans to retain only 51% or a controlling interest in these assets. Ramon S. Ang said that San Miguel may either divest interests in San Miguel Energy Corp. (SMEC) or sell on a per-asset basis, “whichever may be easier.” A number of banks have submitted proposals on how SMC can proceed with the divestment. The company plans to wait until the market is ready. Another option under consideration is to pursue an initial public offering (IPO) for SMEC.