PSALM: SPC Power takes over Naga plant

The Power Sector Assets and Liabilities Management Corp. (PSALM) handed over ownership of the Naga power plant complex in Cebu province to SPC Power Corp., after it exercised its right to top the winning bid of the Aboitiz Group.

SPC Power has already set aside about P50 million to rehabilitate the power generating units.

In a text message, PSALM president and CEO Emmanuel R. Ledesma Jr. told the Inquirer that the state firm already sent a notice of award to SPC Power regarding the ownership of the Naga power plant complex.

“The NOA (notice of award) and COE (certificate of effectivity) were issued pursuant to the board’s decision. This was received by SPC yesterday (on July 30),” Ledesma said.

The COE triggers the effectivity date of the asset purchase agreement, formalizing SPC Power’s transition from operator to owner of the Naga power plant complex.

The notice and COE will also enable SPC Power to undertake a rehabilitation program that may entail investments of up to P50 million.

Presently, only one of six diesel power units in the complex is operational, but at reduced capacity. Estimates show that rehabilitation may cost P8 million per unit, plus P4 million to repair related equipment.

Rehabilitation work may be done within the year, or before the start of the dreaded summer of 2015, when hydroelectric power plants are expected to underperform due to hot weather, while power demand is seen to exceed capacity.

By that time, the Naga power plant may be operational and will be able to add some capacity to the Visayas grid.