Price control proviso mulled for Agus-Pulangi plant sale

Business World Online

Posted on October 13, 2011 10:27:37 PM

THE ENERGY department is considering including a provision in the contract for the Agus-Pulangi hydropower plants designed to make sure “prices are properly contained,” in hopes of reducing widespread opposition to their sale in Mindanao, a Cabinet official told reporters on Thursday.

The Agus 5 plant in Lanao del Sur -- not yet time to let go?

“My view is, if Agus and Pulangi are sold, there is a way to make sure prices are properly contained. There are mechanisms that we will propose that will be included [in the privatization contract] to ensure that prices will stabilize,” Energy Secretary Jose Rene D. Almendras said, declining to elaborate.

The seven Agus plants -- with total capacity of 727 megawatts (MW) and located across the two Lanao provinces -- and the 255-MW Pulangi facility account for more than half of Mindanao’s installed capacity.

Opposition to their sale -- from congressmen, development planners, local officials, business chambers and nongovernment groups -- stems from the fear that selling the plants to private groups would lead to a price spike.

Other state energy officials said separately that the government has been deliberate in its privatization thrust in order to avert problems after asset sales.

“Our target is really to privatize 100% of power assets...If there is any perception of slowness or delay, it is due to the fact that we are being more deliberate in bidding out the assets. But we are not relaxing in privatization,” Conrad S. Tolentino, vice-president for privatization of the Power Sector Assets and Liabilities Management Corp., the agency mandated by the Electric Power Industry Reform Act of 2001 to auction off state power assets, said in a phone interview earlier this week.

He added “the new administration wants to understand everything about the process and also wants to ensure there are no questions that will arise when privatizing assets.”

Energy Undersecretary Josefina M. Asirit, concurred, saying in a separate phone interview that “the department is definitely pushing for privatization; we just want to review the specific issues related to each asset.”

Besides the Agus and Pulangi facilities, other assets planned to be sold include four power barges, as well as the management contracts for various plants, including the 50-MW Southern Philippines Power Corp. diesel power plant in Sarangani, the 92.52-MW Mt. Apo 1 and 2 geothermal power plants in North Cotabato, 100-MW Western Mindanao Power Corp. diesel power plant in Zamboanga City, 145.8-MW Naga complex in Cebu, 165-MW Casecnan hydropower plant in Nueva Ecija, 640-MW Unified Leyte geothermal power plant, and 782-MW Caliraya-Botokan-Kalayaan hydropower plants in Laguna. -- ENJD