AboitizPower to end 55-MW supply contract with Hanjin

MANILA, Philippines — Aboitiz Power Corp. will no longer renew its retail power supply contract with Hanjin Heavy Industries and Construction Philippines which ends next month.

The agreement entered into by AboitizPower’s retail electricity supplier Advent Energy Inc. called for the supply of 55 megawatts (MW) of power to Hanjin.

Hanjin commenced bidding for a new retail power supply contract end-November last year but AboitizPower did not participate in the auction.

“We didn’t actually bid for the Hanjin (supply). We didn’t make an offer at the expiration of contract,” AboitizPower chief operating officer Emmanuel Rubio said.

He said Hanjin was asking for a rate that was “too low for us.”

Prior the RES supply, AboitizPower has been supplying electricity to Hanjin through Subic EnerZone, which is responsible for operating the Subic Bay Freeport Zone’s power distribution system.

Last week, Hanjin filed a petition for rehabilitation at the Olongapo City Regional Trial Court after defaulting on over $400 million in loans owed to local banks, on top of another $900 million in debt with lenders in South Korea.

The company is the biggest foreign investor and top employer at the Subic Bay Freeport.

AboitizPower has contracted enough supply with its power portfolio.

“Part of that I guess is we have capacity that has been contracted. We’re net buyer already with plants coming on stream. While those plants are still on commissioning, we’re already happy with the volume that we have,” Rubio said.

AboitizPower has investments in various thermal and renewable power generating facilities with a total net sellable capacity of 3,350 MW with its partners. Its Cleanergy brand amounts to 1,272 MW, 39 percent of its total net sellable capacity.

It also owns distribution utilities that operate in high-growth areas in Luzon, Visayas and Mindanao, including the second and third largest private utilities in the country.