Sunday, December 12, 2010

Napocor needs P2B to P3B for Agus-Pulangi rehabilitation



THE National Power Corp. (Napocor) will need another P2 billion to P3 billion to optimize the existing generating capacity of the 982-megawatt (MW) Agus-Pulangi hydropower complex in Mindanao.

Energy Secretary Jose Rene Almendras told reporters in a press conference that the sale or bidding of the Agus-Pulangi to prospective bidders is on hold and is deferred until further notice by the House Committee on Energy.

“But in the meantime, we need to rehabilitate and fix up what we can in the [Agus-Pulangi] power plant. We’ve even asked Napocor to find a way to bring back the Agus hydropower complex to the 700-MW capacity that it once was,” Almendras said.

Froilan Tampinco, Napocor president, said the rehabilitation works to bring up additional capacity of about 100- to 200-MW for the hydropower facilities in Mindanao would cost them around P2 billion.

Tampinco said if Napocor would like to add or uprate some of the facilities, for instance the Pulangi which will include the cost for dredging, then it could cost them about P3 billion. “These things are being evaluated together to determine whether it would be better to do selective dredging against just an overall dredging, which may not really put in positive or more capacities to the available water in the Pulangi River,” he said.

Since these facilities are part of the major grid capacities, Tampinco said funding would have to be sourced through Power Sector Assets and Liabilities Management Corp. (Psalm).

The Agus complex has six hydropower plants that could generate more than 700-MW. The 255-MW Pulangi-IV hydropower plant is located in Maramag, Bukidnon.

The 80-MW Agus-I is in Marawi City; 180-MW Agus-II in Lanao del Sur; 158.1-MW Agus-IV in Lanao del Norte; and 55-MW Agus-V; 200-MW Agus-VI and 54-MW Agus-VII are in Iligan City.

“There is a technical proposal to rehabilitate it, but we’re not allowed to do it yet. We have to go ask permission from Congress,” Almendras earlier said.

The Energy department will need to seek Congress’s approval, according to Almendras, if it would be possible to defer the sale of the Agus-Pulangi hydropower complex as well if the government could take the lead in rehabilitating the Agus-VI since the government is not allowed to invest anymore.

He clarified that the technical proposal to rehabilitate the Agus-VI will depend if Psalm and Napocor will approve it.

Almendras also said they have yet to seek financing for the rehabilitation of Agus-VI should the government decides and allows to do it.

He earlier said that the sale of Agus-Pulangi hydropower complex might not push through as originally envisioned in the Electric Power Industry Reform Act.

He said the Energy department is considering using the power plant to balance the interests of consumers and potential investors in Mindanao’s power-generation sector.

“I’ve made it known that I’m not eager to sell Agus and Pulangi hydropower complex. Part of the solution to Mindanao’s power situation is the appropriate use of those hydropower plants not just for supplying electricity, but also in a pricing equation to manage the shifting to the true cost of power,” Almendras said.

Industry stakeholders have earlier suggested that the government maintain the Agus and Pulangi plants to subsidize prices in Mindanao and put in place the right pricing for the private power generators to eventually come up with a lower blended rate.

“I’ve already informed the Psalm that we would like to recommend that we will not sell the Agus-Pulangi. I know that we would also have to go back to the Joint Congressional Power Commission for their conferment, and I’m ready for that. So hopefully, Congress gives us and I would have to explain to Congress why we don’t want to do it,” the Energy chief said.

When sought for clarification whether the government will defer or no longer sell the power plant, Almendras made it clear that the Agus-Pulangi hydropower complex is not yet for sale.

“We don’t want to sell it yet. How long that will be will depend on how soon we can achieve true pricing and make the appropriate adjustments to fall to encourage investors,” he added.

Under the Epira, the Agus-Pulangi hydropower complex should be privatized 10 years after the law’s passage.

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