2007 ANNUAL REPORT Power Corporation - Aboitiz Equity Ventures

The three utilities aim to provide customers with reliable and
reasonably-priced electricity to help power up industrial growth
in the country.
MEZ distributes power at the Mactan Export Processing
Zone II (MEPZ II) in Mactan Island, Cebu. MEPZ II currently
has 75 locators, many of which are semiconductor firms and
electronics manufacturers.
BEZ is the electricity provider in the Western Cebu Industrial
Park (WCIP) in Balamban, Cebu. Balamban is home to the
shipbuilding facilities of Tsuneishi Heavy Industries (Cebu)
and FBMA Marine, as well as the modular fabrication facility of
Metaphil International. Demand for power in the WCIP, which
currently has 10 locators, is expected to grow substantially in
2008 due to the expansion of Tsuneishi’s shipbuilding facilities
and the completion of the new plants of Air Liquide and SIG.
The West Cebu Industrial Park in Balamban, Cebu where the Tsuneishi shipyard is located.
SEZ has been managing the power distribution system of
the Subic Bay Freeport Zone since 2003 under a Distribution
Management Services Agreement (DMSA) with the Subic Bay
Metropolitan Authority (SBMA). The DMSA covers a period of
25 years, with SEZ paying SBMA 40 million annually for the
lease of its power facilities and other properties.
In just four years, SEZ has dropped the systems loss from 14%
to 4.0% allowing it to lower its power rates. The distribution
charge was reduced from 1.00 per kilowatt-hour (kwhr) to
0.59/kwhr upon turnover; the reduction of the system losses
resulted to further savings to the customer amounting to
approximately 0.48 per kwhr.
Power demand in the freeport zone is expected to grow rapidly
in the coming years with the operations of its new container
terminal and the Hanjin Heavy Industries’ multi-billion shipyard,
as well as the opening of the Subic-Clark-Tarlac Expressway. As
of February 2008, SEZ had 2576 customers.
In 2007, SEZ signed a Memorandum of Agreement to provide
power to Hanjin’s shipyard located at the Redondo Peninsula.
With the energization of the peninsula, more investors are
expected to locate in the area.
To help serve this surge in power demand and in anticipation
of the influx of more investments into Subic in the next few
years, AP together with Taiwan Cogeneration Corporation, is
developing a 300-MW coal plant near the Hanjin shipyard. The
plant is scheduled for completion in 2011.
ABOITIZ POWER CORPORATION ANNUAL REPORT 2007 • 41