PSALM preparing to bid out 5 power contracts

MANILA, Philippines—State-run Power Sector Assets and Liabilities Management Corp. will start bidding out in 2014 contracts to manage five power facilities in Mindanao, which can generate a total of 440 megawatts of electricity.

In an interview, PSALM president and CEO Emmanuel R. Ledesma Jr. said the first in the pipeline were the independent power producer administrator (IPPA) contracts for the 100-MW diesel facility of Western Mindanao Power Corp. and the 55-MW bunker fired power station of Southern Philippines Power Corp.

Ledesma said the contracts would likely be turned over to the winning bidders in the following year, prior to the expiration of the build-own-operate contracts covering the two facilities.

Alcantara-led Alsons Consolidated Resources Inc. is currently operating these facilities under the BOO arrangement with National Power Corp. (Napocor), which also serves as the offtaker of the electricity generated by the two diesel plants.

By 2015, Ledesma said PSALM was planning to offer to investors the IPPA contracts for the 200-MW Mindanao coal-fired power plant, the 44.52-MW Mt. Apo 1 geothermal plant and the 48-MW Mt. Apo 2 geothermal facility. The target turnover date for these contracts is 2016, he added.

As the independent power producer administrator (IPPA), the winning bidders will be responsible for the procurement of the power plants’ fuel requirements and the management of the contracted energy output of the facilities, including the sale of power and offering of ancillary services.

Ledesma, however, said that while these “indicative” schedules had been approved by the PSALM Board, the actual implementation had to be coordinated with the Department of Energy, taking into account the energy agency’s objective of ensuring reliable and adequate power supply at all times.

Aside from managing the contracted capacities of these five IPPs, the government, through Napocor, still has presence in the power generation business in Mindanao. Napocor continues to own and operate the Agus and Pulangi hydropower complexes, which have an installed capacity of more than 900 MW, and the 32-MW Power Barge 104. The Agus and Pulangi complexes currently serve about 50 percent of Mindanao’s electricity requirements.

To date, the Joint Congressional Power Commission has yet to issue its decision on whether the Agus and Pulangi hydropower facilities could be privatized or offered to the private sector. Efforts to bid out PB 104, along with PB 101, 102 and 103, failed due to lack of interest from the private sector.