DoE ready for possible sale of 700-MW plant

The government is well prepared to deal with the possible sale of the 700-megawatt Agus-Pulangi hydropower complex to the private sector—a decision that still has to be made by the Joint Congressional Power Commission (JCPC), Energy Secretary Jose Rene D. Almendras said.

The Department of Energy (DoE) has already put together a menu of

options that it can implement once the JCPC decides on whether it will sell the power complex, Almendras told the Inquirer.

“We are awaiting the JCPC’s final decision on that. The problem is there are still quite a number of congressmen who don’t want it sold, so they have to settle that. Either way, we have a plan,” he said.

The energy chief explained that should the Agus-Pulangi hydropower complex—a crucial power generation asset in Mindanao—be put up for auction, the DoE would ensure that the winning bidder would continue to operate the facilities for the benefit of the people.

According to Almendras, the DoE wants to include certain provisions in the contract, such as five-year condition requirements, trading conditions, ownership conditions, and even technical considerations on the use of the must-run and ancillary facilities.

These provisions, he said, must be followed strictly.

“I know that before, I said I was not in favor of selling the Agus Pulangi hydropower complex, but now, I’m amenable to it because we’re putting in a lot of provisions in the contracts to ensure that it will be operated for the benefit ofthe people of Mindanao,” Almendras said.

Earlier, the energy chief was cited as acting illegally when he opposed the privatization of the Agus Pulangi complex, as mandated under the Electric Power Industry Reform Act (Epira).

In case the JCPC decides not to push through with the bidding of the hydropower complex, the DoE will ensure that the Agus and Pulangi complex will not be a burden to the state, Almendras said.

“If these facilities will not be put up for auction, we can sell the concession instead. We can also seek for an operation and maintenance contract … There are many options,” Almendras stressed.

The private sector has been urging the government to proceed with the sale of the Agus-Pulangi hydropower complex in Mindanao, explaining that any other form of privatization will not be economically feasible and may even unnecessarily hike power prices on the island.

Ernesto Pantangco, president of the Philippine Independent Power Producers Association (Pippa), earlier said that the proposals by

other groups to have an operation and maintenance agreement prior to the sale of the facilities would not work because “you’ll be operating and maintaining a plant that is dilapidated. As such, there is no incentive to make investments in improving the power plant.”

Also, the group has proposed that the sale of the hydropower complex must come with long-term power supply contracts to attract investors.