TeaM Energy Corp. (formerly Mirant Philippines Inc.) will offer for sale 235 megawatts (MW) of its excess capacity through the interim open access scheme.
TeaM Energy president and CEO Federico E. Puno told reporters about 200 MW will come from excess power in the Sual power plant while 35 MW will be sourced from the Pagbilao facility.
The proposed interim open access (IOA), now being evaluated by the Energy Regulatory Commission (ERC), will allow power generators to sell directly to big industrial and commercial power users.
IOA will be done while waiting for the implementation of open access which under the Electric Power Industry Reform Act (EPIRA) will only happen if the government is able to sell 70 percent of the National Power Corp.’ s generating assets in Luzon and Visayas and 70 percent of its supply contracts.
At present, the Power Sector Assets and Liabilities Management Corp. (PSALM) has yet to fulfill these two conditionalities, thus the need to undertake the IOA which would provide electricity users an option on where to source their power requirement.
“We are all geared up for open access,” Puno stressed.
While waiting for the IOA, Puno said they are trading their excess output at the wholesale electricity spot market.
Once sold through IOA, he said they expect to generate $100,000 per megawatt or $23.5 million in additional revenues from the excess capacity.
“We’re trading this at the WESM right now where prices may sometimes be low,” he said.
Puno said the company has already lined up 42 MW worth of bilateral contracts with Benguet Electric Cooperative Inc., La Union Electric Cooperative Inc. and Republic Cement.
But he said they have to secure the approval of Napocor before they could enter into these contracts. TeaM Energy is an independent power producer (IPP) of Napocor.
Puno said TeaM Energy wants to take advantage of the IOA to improve its earnings performance. In 2007, its income dropped significantly to $25 million from $200 million in 2006.
He said the drop in earnings was brought about by the huge debt payments of the company last year.
“Despite cost cutting and plant efficiency measures, the company’s debt load is now higher because of the loan the company incurred as a result of its acquisition of Mirant Corp.’s assets in the Philippines,” he said.
“We generated $25 million net income last year. However, after the acquisition (from Mirant Philippines), our debt load is now higher. From $400 million to $500 million, now its $3 billion,” he added.