Gov’t to earn $3.2B from power gen privatization

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About 1600 megawatts of power generation capacity are up for privatization, the Power Sector Assets and Liabilities Management Corporation says
FOR BIDDING. In August, PSALM commenced the selection and appointment of the independent power producer administrator (IPPA) for the Mindanao I and II (Mt. Apo 1 and 2) geothermal power plants - PSALM's first IPPA auction in the Mindanao region. Photo from PSALM

MANILA, Philippines – The Power Sector Assets and Liabilities Management Corporation (PSALM) said over the weekend that more than 1600 megawatts (MW) of power generation capacity are up for privatization and the government is estimating to earn about $3.2 billion from it.

PSALM handles the sale of the remaining state power assets and financial obligations of the National Power Corporation (NAPOCOR), as mandated by Republic Act No. 9136, or the Electric Power Industry Reform Act of 2001 (EPIRA).

PSALM president Emmanuel Ledesma, Jr. said that among the power facilities up for bidding include:

  • The 32MW Power Barge 104 (PB 104) in Davao City
  • 727MW Caliraya-Botocan-Kalayaan (CBK) hydropower facility
  • Agus hydro power plant
  • Independent power producer administrator (IPPA) contracts for the Unified Leyte (UL) geothermal power plants
  • 210MW Mindanao coal-fired power plant in Misamis Oriental
  • 140MW Casecnan multipurpose hydroelectric power plant

The 850MW Sucat thermal power plant is also up for bidding.

PB 104 will be sold within this year; UL in the first quarter of 2015; Mindanao coal power plant by middle of 2015; Casecnan facility in the third quarter of next year; and CBK in early 2016. Agus is eyed for sale in 2017.

“There’s still roughly around 1,600 MW remaining. So assuming the rule of thumb is applied then that’s going to be multiplied by $2 million per MW,” Ledesma said.

Overall, there is still 20% of government-owned power assets that have yet to be privatized since PSALM took over NAPOCOR, Ledesma added.

Other power facilities sold since Ledesma was appointed in PSALM include the 153.1-MW Naga Power Plant to SPC Power Corporation for P1.14 billion ($25.34 million*) and IPPA for 40 strips of energy of Unified Leyte Geothermal Power Plants at P4.66 ($0.104) per kilowatt hour (kWh).

K-Water takes over Angat hydroelectric power plant

To date, the biggest power facility sold by PSALM is the 218MW Angat hydroelectric power plant to Korea Water Resources Corporation (K-Water) for P19.66 billion ($437.37 million*).

K-Water took over the facility on Friday, October 31, more than 4 years since it won the bidding in April 2010.

The delay for the takeover was due to a number of reasons, particularly a court battle over the legality of PSALM’s conduct of the bidding.

The Angat power facility privatization will not affect the water supply from the Angat reservoir as Angat Dam remains the Philippine government’s property.

In March, Senator Francis Escudero filed a bill amending the Electric Power Industry Reform Act (EPIRA) to prohibit the sale of the remaining power assets of the government.

Under Senate Bill 2167, Escudero said that the national government should retain control of the remaining assets of NAPOCOR.

Escudero’s bill amends the provision in the EPIRA stating that all Napocor assets “shall be sold in an open and transparent manner through public bidding, and the same shall apply to the disposition of independent power producers (IPP) contracts.”

Luzon is feared to experience blackouts in the summer of 2015 if there are no crucial steps to avert them.

A resolution in Congress giving President Benigno Aquino III emergency powers to avert the looming energy crisis next year will not include contracting additional capacity. –

*($1 = P44.95)

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