Visit to the Ambuklao Power Station
The highly anticipated 2026 Philippine Electricity Power Industry Forum (PEPIF) was held in Baguio City on March 12, organized by the Independent Electricity Market Operator of the Philippines (IEMOP) and jointly sponsored by four companies: SN Aboitiz Power (SNAP), Melaco Energy Corporation (MGEN), ACEN, and Exist. Following the conclusion of PEPIF, the author submitted a request to SNAP to visit one of its recently commissioned hydropower stations. Upon approval, a site visit was conducted to the Ambuklao Hydropower Station, which is located just an hour’s drive from Baguio City. Chris Vargas of SNAP accompanied the author, while Hollis Fernandez, plant manager of the Ambrocla Power Plant, gave us a tour and, in under an hour, provided a crash course in mechanical engineering basics—think “Mechanical Engineering 101.” Mr. Fernández is easygoing. He led us deep beneath the massive reservoir to tour the Ankobra Hydroelectric Power Station’s facilities, which include pressure penstocks, three Francis turbines (each generating 37.5 MW), generators, step-up transformers for transmission, a cooling system, an intricate network of cables, and a long, steep staircase that winds all the way to the top of the reservoir—hundreds of steps with no landings. Of course, we didn’t climb; even though I used to be an avid climber when I was younger, at my age my legs and feet just won’t allow it anymore.During PEPIF, SNAP President and CEO Joseph Yu stated that the company’s total hydropower installed capacity operating in northern Luzon amounts to 673 megawatts. He also emphasized that, although SNAP operates hydropower facilities, the dams, weirs, and reservoirs remain owned by the government through the National Power Corporation–Power Sector Assets and Liabilities Management Corporation (NPC-PSALM) and the National Irrigation Administration (NIA). The author consulted the Department of Energy’s website for information on large hydropower stations on Luzon Island. Among the nine power stations, SNAP owns three: Amakula, Binta, and Maghat. As Mr. Yu and Mr. Fernandez noted, the positive development is that SNAP has significantly increased the generating capacity of these three power plants. For example, the Ambuklao hydropower plant’s generating capacity was increased from 75 MW to 112.5 MW, an addition of 37.5 MW, without raising the dam. This was achieved through the modernization and innovation of facilities. Its Norwegian partner, Scatec (formerly SN Power), has provided state-of-the-art facilities and engineering innovations, given Norway’s position as one of the world’s most advanced producers of hydropower. Aboitiz Power (AP) is the largest hydropower operator in the Philippines, particularly following its acquisition of the Kalayaan–Botocan–Kaliwatan (CBK) Pumped Storage Hydroelectric Plant (PSH) through the Thunder Consortium. The Thunder Consortium is a joint venture between AP and Japan’s Sumitomo Corporation and J-Power (Japan Power Corporation). In addition, there are three power plants operated by SNAP, as well as the Baguio Power Plant of Luzon Hydroelectric Corporation. San Miguel Global Power (SMGP) is the second-largest hydropower operator. Through its subsidiary, Strategic Power, it operates the large San Roque Hydroelectric Plant, as well as the Angat Hydropower Plant (see Table 2).
A key figure in the early expansion of the SNAP business was Manny Rubio. In 2007, while serving as SNAP’s president, he successively acquired the Maggot, Ambuklaw, and Binga power plants. He developed a project financing structure within one year to acquire these three power plants, truly a financial prodigy! In 2007, Ambuklao remained out of service following the 1990 major earthquake, Binga was operating but with reduced performance, and Rubio had converted Magat from a baseload power plant to a commercial peaking plant. After 18 months of operation, SNAP surpassed its financial targets thanks to effective trading strategies and rigorous operational discipline. Rubio subsequently served as AP’s president and CEO from 2015 until his retirement in 2024. The day after he retired, Manny V. Pangilinan invited him to serve as the head of MGEN. MGEN is fortunate to have this finance prodigy with an engineering background. The author also interviewed Mr. Yu of SNAP and attended his presentation at PEPIF—another remarkable individual who excels in both technology and finance. He not only discussed the megawatts generated by hydropower and the megawatt-hours of battery energy storage systems, but also touched on digital transformation, data science, predictive analytics, and integrated remote operations—topics that, to me, were as foreign as an alien language.
Net energy meteringMeanwhile, let us briefly explain how rooftop solar owners can receive payments from private distribution utilities (DUs) and electric cooperatives (ECs) through net metering. Currently, payments are based on the average generation costs of DU and EC, which are higher than the average price in the Wholesale Electricity Spot Market (WESM). When formulating and implementing net metering policies, WESM’s daytime electricity prices are relatively high, making it economically rational to purchase power at the average generation cost. At that time, the cost of solar panels was more than twice what it is today—roughly double the current range of US$0.11 to US$0.13 per peak kilowatt-hour. Today, both WESM prices and solar panel costs are low. Why, then, do we still compensate rooftop owners based on the average cost of electricity generation? This drives up DU and EC tariffs, which are ultimately passed on to consumers who cannot afford rooftop solar systems. The business case for rooftop solar has evolved; it no longer relies on incentives such as net metering. Dr. Bienvenido S. Pralles is the president of Bienvenido S. Pralles Consulting Services, Ltd., and the organization “Minimal Government Thinkers,” as well as an International Fellow at the Soros Foundation.