The state-run Power Sector Assets and Liabilities Management Corp. (PSALM) on Tuesday said it was confident it could bid out the contracted capacities of two independent power producers by the fourth quarter this year.
In an interview, PSALM president Emmanuel Ledesma Jr. said the government still intended to push through with the bidding for the independent power producer administrator (IPPA) contracts for the 640-megawatt Unified Leyte geothermal facilities and the 150-MW Casecnan hydropower plant.
According to Ledesma, PSALM was working on dividing the contracted capacities of the Unified Leyte complex to prevent market dominance by a single firm and make the facility financially viable.
“We are still working on [the Unified Leyte IPPA contract] but we intend to divide [the contracted capacity] into two or three contracts which, in turn, would allow more bidders to participate and allow PSALM to maximize the proceeds that may be generated from the privatization,” Ledesma told the Inquirer.
Given the large generating capacity of the Unified Leyte geothermal complex, PSALM earlier explained that there might be not many companies left to take on the IPPA contract without breaching the market caps on power generation in the Visayas. Meanwhile, those who may be allowed to acquire the Unified IPPA without breaching the caps might not have sufficient financial capacity.
Under the Electric Power Industry Reform Act, a company or group of related companies is barred from owning, operating or controlling more than 30 percent of the installed generating capacity of a grid or 25 percent of the country’s total installed capacity.
Ledesma has since stressed the necessity to sell the remaining government-owned power assets to raise funds and pay for its outstanding financial obligations, which stood at $15.58 billion.
In a bid to cut its debt, PSALM has implemented a liability management program and is trying to recover at least P140 billion worth of contract costs from power consumers through the imposition of a universal charge.