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THE
Philippine Independent Power Producers Association (Pippa)
took a dim view of the lack of movement in selling the
independent power producer (IPP) contracts of the
National Power Corp. (Napocor) to IPP administrators,
originally one of the prerequisites to open access.
“There
has been no progress in the government’s bid to
privatize the Napocor-IPP contracts,” said Ernesto
Pantangco, president of Pippa.
Although
the president of the Power Sector Assets and Liabilities
Management Corp. (PSALM), Jose Ibazeta, had indicated
that he intends to start the bidding for the Napocor-IPP
contracts beginning August of this year, PSALM has yet
to decide on whether to bid out IPP contracts on a
per-plant basis or to bundle them, he said.
Pantangco proposed the 1,200-megawatt (mW) gas-fired
Ilijan power plant should be the first to be auctioned
off to an IPP Administrator, since the winning bidder
would not have issues on fuel supply and all they have
to do is estimate their revenues.
He added
that transition-supply contracts should be attached to
the power plant because it is a baseload plant, which is
sufficiently large.
Pippa’s
earlier proposal to bid out the IPPAs on a per plant
basis did not sit well with the PSALM because the state
agency thinks going that way would be a lengthy process
and that some power plants are inherently stranded.
He
presumed that part of their plan is to “bundle the bad
plants with good plants.”
Pantangco added that PSALM proposes to group all of the
IPP contracts—about 6,200 mW in total—into three
clusters of 2,000-mW each of mixed generation fuel
types.
Pantangco said investors are concerned, saying that a
2,000-mW cluster is too big, considering the valuation
PSALM has been getting in privatizing Napocor generation
assets are about $2 million per mW.
“If you
multiply that price by 2000 mW, that comes to $4 billion
per cluster and the required 40- percent down payment
amounts to $1.6 billion.
So who’s going to buy a plant for $4 billion?” he asked.
Ibazeta had said, “if we compute everything based on the
nominal value, the contracts could amount to at least
$13 billion.”
He
believes the IPPA bidding, to be a success, must augur
lower power rates and lower universal charges passed on
to consumers. He added that this depends on PSALM being
able to sell the IPP contracts at good prices.
Under
the Electric Power Industry Reform Act, PSALM is
required to appoint IPP Administrators to manage and
control Napocor-IPP plants until such time that the
contracts have expired.
Included
in the list of IPPs to be transferred to the IPPAs are
the 1,200-mW Ilijan natural gas-combined cycle owned and
operated by Korean Electric Co. (Kepco)-Ilijan Corp. in
Batangas, the 1,000-mW Sual coal units 1 and 2 operated
by Mirant Power Corp. in Pangasinan, the 700-mW Pagbilao
coal units 1 and 2 in Quezon also run by Mirant;
The
215-mW Bauang diesel plant of Bauang Power Corp. in
Zambales, the Enron Power Corp.’s 116-mW Subic diesel
plant, the Casecnan Multipurpose Hydro of the National
Irrigation Administration in Nueva Ecija, the 340-mW San
Roque Multipurpose Hydro of Marubeni/Sithe in Pangasinan,
the 70-mW Bakun Hydro of Aboitiz Equity Ventures in
Ilocos Sur, and the PNOC-Energy Development Corp.’s
440-mW Leyte B geothermal power plant. |
