The joint venture of Manila Electric Co., Marubeni Corp., The Kansai Electric Power Co. Inc. and Chubu Electric Power Co. Inc. are investing P6.3 billion over 25 years to operate and maintain the electric power distribution system in New Clark City.
The decision followed the signing of a joint venture agreement between the Meralco Marubeni Consortium and Bases Conversion Development Authority on April 3 for the financing, design and engineering, establishment, construction, development and operation and maintenance of the electric power distribution system in New Clark City project.
“This transaction involves the financing, design and engineering, establishment, construction, development and operation and maintenance of the electric power distribution system in New Clark City for an initial period of 25 years, renewable for another 25 years,” Meralco said in a disclosure to the stock exchange Friday.
Meralco said the necessary regulatory requirements included Philippine Competition Commission’s approval, legislative franchise, certificate of public convenience and necessity and capital expenditures and rate approvals by the Energy Regulatory Commission.
“The transaction is an opportunity for Meralco to participate in the development of New Clark City and generate additional revenues in the operation of its electric distribution system there,” Meralco said.
The Meralco-Marubeni consortium special purpose vehicle is majority-controlled by Meralco with a 60-percent stake, Marubeni Corp. with 20 percent, Kansai Electric Power Co. with 10 percent and Chubu Electric Power with 10 percent. BCDA will reportedly take the remaining 10 percent.
BCDA already issued the notice of award to Meralco as the power distributor of New Clark City after offering the lowest power supply rate. Meralco and Marubeni submitted the lowest power distribution rate for the New Clark City at P0.6188 per kilowatt-hour.
The Meralco consortium is initially investing around P1 billion to put up the power distribution facilities at New Clark City in preparation for the 30th Southeast Asian Games slated late this year.
Meralco senior vice president Rogelio Singson said the company was initially looking at a demand of 10 to 14 megawatts for the New Clark City facilities.
“It can still be ramped up. So we were telling them, at first they want everything smart, underground. I said, with that demand, how much tariff are you prepared to pay…Overhead, we can do it….Smart city yes, but not immediately until you have the consumption,” Singson said.
He said Meralco committed that the power lines to the facilities would be ready by June or July.
“We’re helping them [BCDA] out in terms of specifications so that when it is eventually turned over to Meralco, it is acceptable,” Singson said.
The New Clark City managed by BCDA is envisioned to be the first smart, green and sustainable metropolis in the country where locators and residents will enjoy low utility rates.
The New Clark City will have the first completely smart power grid in the country. Supported by state-of-the-art facilities comparable with other smart cities throughout the world, the New Clark City smart grid also has better reliability standards.
Locators can also enjoy access to real-time information from the distribution utility, allowing them to manage their electricity consumption more effectively.
Phase 1 of the New Clark City development includes the construction of the National Government Administrative Center and world-class sports facilities to be used for the Philippines’ hosting of the Sea Games.