SIX bidders are now vying for the selection and appointment of the Independent Power Producer Administrator (IPPA) for the bulk energy of the 200-megawatt (MW) Mindanao Coal-Fired Thermal Power Plant (Mindanao Coal).
There were originally 12 bidders for the project.
“From the 12 interested bidders, only 10 of them actually bought bid documents. And of this, the number of bidders was reduced to six because some of them decided to form a group among themselves. One bidder partnered with another to form one group, and so on,” said Power Sector Assets and Liabilities Management (PSALM) Corp. President Lourdes S. Alzona.
PSALM recently met with the 12 prospective bidders for the Mindanao Coal, namely, Conal Holdings Corp.; FDC Davao del Norte Power Corp.; FirstGen Northern Power Corp., GDF Suez Energy Philippines Inc.; Masinloc Power Partners Co. Ltd.; Meralco Powergen Corp.; Nexif Pte. Ltd.; SMC Global Power Holdings Corp.; SPC Power Corp.; Team (Philippines) Energy Corp.; Therma Southern Mindanao Inc. and Vivant Energy Corp. The auction is scheduled on November 25, the PSALM official said. Located in Misamis Oriental, the Mindanao Coal plant was constructed in 2006 for a 25-year Power Purchase Agreement under a build-operate-transfer scheme that ends in 2031.
The power plant supplies about a fifth of Mindanao’s power requirements. The PSALM board has agreed to include a three-year lock-in period in the contract terms for the selection and appointment of the Mindanao Coal IPPA.
During the lock-in period, the winning bidder would have no choice but to adopt the existing power rate sold by current plant operator Steag State Power Inc. of Germany. In this way, electricity rates will not go up because the rates that will be used are the rates currently imposed based on the contract with Steag.
The downside, however, is that this may discourage prospective bidders because they would not be in control of the pricing scheme for the first three years.
Alzona said bidders were already informed about this. “This is not the reason the number of interested bidders were trimmed. It’s just that some decided to partner or joined forces,” she added.