Business World Online
Posted on August 07, 2011 09:31:04 PM
AN INVESTOR interested in bidding for the state-owned hydroelectric power plants in Mindanao called on the government to keep the facilities and just auction off the rights to sell the output.
This, as firms are reportedly hesitant to take on the large Agus and Pulangui power plants if these are split up as two assets to comply with regulatory limits on how generating capacity a firm can control in a region.
“The EPIRA (Electric Power Industry Reform Act of 2001) has limitations on how much capacity any entity can control in the grid. The Agus system itself has a dependable capacity of 600 megawatts (MW) or 700 MW. So right away you consume all your headroom as far as capacity,” Joseph C. Nocos, Sarangani Energy Corp. vice-president for business development, told reporters on Friday.
Sarangani Energy, part of the Alsons Consolidated Resources Corp. group, is one of the stakeholders that have expressed interest in bidding for the Agus-Pulangui plants.
Splitting up the two assets to address capacity limits, meanwhile, “will create all sorts of operational problems,” Mr. Nocos said, explaining that the two plants were linked by the same system and could thus cause tiffs between rival firms operating one facility each.
The suggestion instead is to privatize the future output of the power plants much like an independent power producer administrator contract but have the government keep control over the power plants, he said.
The government can then hire or bid out third-party operations and management of the plant.
“My own personal view here is perhaps the Power Sector Assets and Liabilities Management Corp. (PSALM) could look at alternative forms of privatization... privatizing not the asset but the future output,” Mr. Nocos said.
“I’m not aware of that proposal. But PSALM will follow Energy department and PSALM board instructions on Agus-Pulangui. And in any case, privatization of Agus-Pulangui must be done in consultation with Congress as per the EPIRA,” said Conrad S. Tolentino, vice-president of PSALM, in a text message toBusinessWorld.
The Department of Energy earlier sought for the deferment of privatization of Agus-Pulangui to prevent possible price shocks until more capacity is made available in the region. The department however noted the facility will still be bid out.
The Agus hydropower plant has seven units with a combined generation total of 700 MW. The first of the six units was constructed in 1953 and the newest one started operation in 1992. Agus is located in the two Lanao provinces.
The Pulangui hydropower plant in Bukidnon generates 255 MW and began operations in 1985. Both plants provide baseload energy to Mindanao.
Mr. Nocos went on to note that more alternative sources of power are needed in the region. Shares in Alsons Consolidated last closed at P1.48 apiece, down 1.98% from its previous close of P1.51. -- Emilia Narni J. David
“The EPIRA (Electric Power Industry Reform Act of 2001) has limitations on how much capacity any entity can control in the grid. The Agus system itself has a dependable capacity of 600 megawatts (MW) or 700 MW. So right away you consume all your headroom as far as capacity,” Joseph C. Nocos, Sarangani Energy Corp. vice-president for business development, told reporters on Friday.
Sarangani Energy, part of the Alsons Consolidated Resources Corp. group, is one of the stakeholders that have expressed interest in bidding for the Agus-Pulangui plants.
Splitting up the two assets to address capacity limits, meanwhile, “will create all sorts of operational problems,” Mr. Nocos said, explaining that the two plants were linked by the same system and could thus cause tiffs between rival firms operating one facility each.
The suggestion instead is to privatize the future output of the power plants much like an independent power producer administrator contract but have the government keep control over the power plants, he said.
The government can then hire or bid out third-party operations and management of the plant.
“My own personal view here is perhaps the Power Sector Assets and Liabilities Management Corp. (PSALM) could look at alternative forms of privatization... privatizing not the asset but the future output,” Mr. Nocos said.
“I’m not aware of that proposal. But PSALM will follow Energy department and PSALM board instructions on Agus-Pulangui. And in any case, privatization of Agus-Pulangui must be done in consultation with Congress as per the EPIRA,” said Conrad S. Tolentino, vice-president of PSALM, in a text message toBusinessWorld.
The Department of Energy earlier sought for the deferment of privatization of Agus-Pulangui to prevent possible price shocks until more capacity is made available in the region. The department however noted the facility will still be bid out.
The Agus hydropower plant has seven units with a combined generation total of 700 MW. The first of the six units was constructed in 1953 and the newest one started operation in 1992. Agus is located in the two Lanao provinces.
The Pulangui hydropower plant in Bukidnon generates 255 MW and began operations in 1985. Both plants provide baseload energy to Mindanao.
Mr. Nocos went on to note that more alternative sources of power are needed in the region. Shares in Alsons Consolidated last closed at P1.48 apiece, down 1.98% from its previous close of P1.51. -- Emilia Narni J. David
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