BAUANG PRIVATE Power Corp. Tuesday turned over its 225-megawatt (MW) diesel-fed power plant in Bauang, La Union, to the government following the expiration of the 15-year cooperation period covering the project.

In a disclosure to the Philippine Stock Exchange, the Lopez-led First Gen Corp. said the facility was turned over to the state-owned National Power Corp. and Power Sector Assets and Liabilities Management Corp. (PSALM).

According to First Gen, the Bauang power facility was constructed pursuant to a build-operate-transfer (BOT) agreement among Napocor, Bauang Private and First Private Power Corp. (FPPC) during the power crisis in the early 1990s.

FPPC holds a 92.5-percent stake in Bauang Private, while the remaining 7.5 percent is held by Chartis Philippines Insurance Inc. (formerly Philam Insurance).

FPPC, meanwhile, is owned by First Gen, which holds a 40-percent stake; Manila Electric Co., also with a 40-percent interest, and JG Summit Holdings Inc. of taipan John Gokongwei, with the remaining 20 percent.

Early this year, the Bauang power facility, along with other diesel-based power plants, provided the much-needed additional supply to the Luzon and Mindanao grids, which experienced acute supply shortages.

The shortages, which resulted in rotating brownouts during the first few months of the year, were due to factors such as the El Niño dry spell, which drastically cut the generating capacities of hydroelectric power plants.

The independent power producer administrator (IPPA) contract for the Bauang facility has been scheduled to be auctioned this year as part of the government?s privatization process.

IPPAs are qualified independent entities that administer, conserve and manage the contracted energy output of Napocor?s IPP contracts, including selling the energy production and offering ancillary services.

Under RA 9136, or the Electric Power Industry Reform Act of 2001, the transfer of the management and control of at least 70 percent of the total energy output of power plants under contract with Napocor to IPPAs was one of the conditions for the implementation of retail competition and open access.

Retail competition and open access will allow consumers to choose their own power suppliers. Amy R. Remo