SBMA approves revised lease deal for 600-MW coal plant | Inquirer News

SBMA approves revised lease deal for 600-MW coal plant

By: - Correspondent / @amacatunoINQ
/ 12:30 AM April 16, 2015

SUBIC BAY FREEPORT—The Subic Bay Metropolitan Authority (SBMA) has finalized the lease development agreement for the construction of a 600-megawatt coal-fired plant here despite stiff opposition from environmentalists and renewable energy advocates.

Roberto Garcia, SBMA chair and administrator, said the agency’s board of directors passed a resolution amending the original lease agreement for a 300-MW coal-fired plant that specified a P1-million annual rent.


The consortium leading the project eventually proposed to put up a 600-MW facility, which, Garcia said, required an amended lease agreement.

“The SBMA will generate P350 million in total revenue from the power plant when its commercial operation starts in 2019,” he said.


The revenue, Garcia said, included the new value of the lease for the land on which the proposed plant would rise. The new lease value amounts to P200 million, while the remaining P150 million will come from other fees, he said.

Redondo Peninsula Energy Inc. (RP Energy), a consortium composed of Manila Electric Co. (Meralco), Aboitiz Power and Taiwan Cogeneration Corp., signed a 50-year lease development agreement with the SBMA on June 28, 2010, for the use of 38 hectares of land in the free port. The plant is being developed at Mount Redondo in Subic town, Zambales province.

The project was stopped at the stage when the government and RP Energy were revising a lease development agreement.

On Feb. 3, the Supreme Court set aside the writ of kalikasan requested by environmental groups and No to Coal in Subic Bay Broader Coalition, a group of environmentalists and renewable energy advocates.

The high court also upheld the validity of the environmental compliance certificate issued to RP Energy by the Department of Environment and Natural Resources in December 2008.

Garcia said the revenue from the power plant’s operation would increase the agency’s annual income by 15 percent.

“Under the agreement, Meralco is going to purchase the whole output of 600 MW,” he said.


The SBMA will also get the same terms agreed on by Meralco and RP Energy, Garcia said. “For example, if Meralco will purchase the output for P8 per kilowatt-hour, then SBMA must be able to buy it for the same price,” he said.

The SBMA and RP Energy have resolved the issue on the environmental supervision of the project.

“At any time that the monitoring team finds any damage [to the environment], the SBMA has the authority to close down the plant,” Garcia said.

Earlier, groups opposing the proposed power plant vowed to pursue the fight and oppose the construction.

Members of Subic Bay Chamber for Health and Environment Conservation, in a statement released after the high court ruling in February, said that while they were disappointed with the decision, they would respect it.

“We maintain our position that a coal-fired power plant is detrimental to the environment and the health of the people. We remain strongly opposed to the location of a coal-fired power plant in Subic Bay,” the group said.

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