Mindanao plant bidding on track
The government tender for the contract to manage the output of the 200-megawatt Mindanao coal-fired power plant—the biggest supplier of the energy-starved Mindanao grid—is on track but may incorporate new terms.
Energy Secretary Carlos Petilla told reporters that Power Sector Assets and Liabilities Management Corp. (PSALM) might push through with the bidding as scheduled but might peg the energy generation cost for the plant to its current rate over two to three years.
Petilla said the move was aimed at preventing a spike in power rates among clients of the Mindanao coal-fed power plant, which serves about 20 percent of the regional grid’s requirement.
The plant, located at the Phividec Industrial Estate in Villanueva, Misamis Oriental, is presently generating electricity and is operated by German-led STEAG State Power Inc. (SPI). It was constructed in 2006 under a 25-year build-operate-transfer (BOT)-power purchase agreement scheme that will end in 2031.
PSALM had said that it would bid out the Independent Power Producer Administrator (IPPA) contract for the power station in September. PSALM data showed that 12 firms have complied with initial requirements to join the bidding. These are Conal Holdings Corp., FDC Davao Del Norte Power Corp., FirstGen Northern Power Corp., GDF Suez Energy Philippines Inc., Masinloc Power Partners Co. Ltd., Meralco Powergen Corp., Nexif Pte. Ltd., SMC Global Power Holdings Corp., SPC Power Corp., Team (Philippines) Energy Corp., Therma Southern Mindanao Inc. (TSMI) and Vivant Energy Corp.
Petilla had also said that he wanted to ask PSALM to defer the bidding of the STEAG power plant to next year or until such time that the power plants of the Aboitiz and San Miguel groups are in operation. However, Petilla said the tender could still push through as long as there were measures in place to ensure power rates in Mindanao would remain stable.
An IPPA is an entity chosen by PSALM, which administers, conserves and manages the contracted power output between an Independent Power Producer (IPP) and the state-owned National Power Corp., whose assets are managed by PSALM. The IPPA is a post-industry liberalization concept to supposedly take away the market risk from government to the private sector.
PSALM conducted the pre-bid conference for the prospective bidders last May 6 in preparation for the bidding scheduled on Sept. 23, 2015.
