TeaM Energy to re-assess expansion plans for Pagbilao power plant

TeaM Energy Corp. will re-assess the results of its feasibility study on the expansion of the 735-megawatt (MW) Pagbilao coal-fired power plant in Quezon.

Industry sources said TeaM Energy, formerly Mirant Philippines Inc., plans to scrutinize the expansion of the Quezon-based power facility.

TeaM Energy, now being run by the Japanese consortium of Marubeni Corp. and Tokyo Electric, has yet to award the engineering, procurement and construction contract for the Pagbilao expansion to Mitsubishi Heavy Industries.

Based on the study, the company would expand the capacity of the Pagbilao plant by 350-MW to be completed next year.

Aside from Pagbilao, TeaM Energy also plans to undertake the expansion of its two other power plants the 1,200-MW coal-fired Sual plant and the 1,200-MW Ilijan natural gas facility in Batangas.

Initial estimates show that the company would need some $4 million to $5 million in capital this year for the maintenance of these power plants.

TeaM Energy president Federico Puno earlier told reporters that they are eyeing about $23.5 million in additional revenues from the sale of its current excess capacity totaling 235-MW.

“We are gearing for the interim open access. We are trying to sell 200-MW from Sual and 35-MW for Pagbilao,” Puno said.

He said the company targets to generate $100,000 per MW of electricity that it can sell with the entry of interim open access. Open access gives consumers with an average demand of one MW the power to choose their own power supplier.

“Right now, we’re trading at 235 MW in and out of the wholesale electricity spot market,” Puno said.

“Without open access, we cannot open our excess capacity for sale to other industries and economic zones. We have to seek approval from the National Power Corp.,” he said.

In 2007, TeaM Energy generated a net income of $25 million, a significant drop from $200 million a year earlier.

The decline in earnings could be attributed to the company’s debt load, which was weighed down by the loan it incurred as a result of its acquisition of Mirant Corp.’s assets in the Philippines.

But Puno said the expansion of their facilities would help in generating more revenues.

“We have to expand. We have to sell excess capacity to get higher revenues,” Puno said.