Government urged not to sell Agus and Pulangi power plants

By Ted P. Torres (The Philippine Star) Updated August 08, 2011 12:00 AM MANILA, Philippines - “Don’t sell Agus-Pulangi, but sell its future output.” This was the recommendation of Sarangani Energy Corp. vice president for business Joseph Nocos. Sarangani Energy is a member of the Alcantara Group of Companies. “Perhaps they (Power Sector Assets and Liablities Management Corp. or PSALM) could look at alternative forms of privatization. Maybe we should look at privatizing not the asset, but the future output that will come out of these plants,” Nocos said. He said the Agus-Pulangi privatization can be done similar to the concept of the independent power producers (IPPs). The Electric Power Industry Reform Act of 2001 states that the Agus hydro power plants together with the Pulangi hydro facilities may be privatized not earlier than 10 years from the passage of the law. The Sarangani Energy official said that selling future outputs rather than privatize the hydro power plant addresses other concerns Mindanaoans in preserving vital natural resource. “So if you just privatize the output, you keep ownership of the asset in the hands of Napocor (National Power Corp.) or PSALM,” he said. PSALM can still have the option to bid out the operation and maintenance of the plant, but without selling the asset. The utilization factor of the Agus-Pulangi plants can be forecasted and the total kilowatthours (kwh) available from the assets over the long-term can be sold to interested parties. Nocos argued that selling the plants on an individual basis would create operational problems, since the plants are cascading. The Agus complex has seven facilities with total capacity of over 700 megawatts (MW). The first Agus plant, Agus 6, was created in 1953. The newest of the Agus power plant is Agus 1, which went online in 1992.