PSALM Privatizing 4 Power Barges

Manila Bulletin
By JAMES A. LOYOLA
November 5, 2011, 1:00am


MANILA, Philippines — The Power Sector Assets and Liabilities and Management (PSALM) Corporation will begin the privatization of Power Barges (PB) 101, 102, 103 and 104 before the end of the year.


PSALM president Emmanuel R. Ledesma, Jr. said that the PSALM Board has approved the sale of the power barges with the condition to transfer the barges to Mindanao to augment the power supply in the region.


The transfer will occur after the power situation stabilizes in the Visayas where the power barges are currently moored. The power barges are movable and can be relocated anywhere with adequate mooring structures.


Ledesma added that PSALM, in coordination with the Department of Energy, has yet to finalize the timeline and the details for the relocation. All transfer costs will be for the account of the winning bidder.


Designed as base-load plants, PB 101, 102, 103 and 104 are nominal 32-megawatt (MW) barge-mounted bunker-fired diesel generating power stations that consist of four identical Hitachi-Sulzer diesel generator units rated at 8 MW each.


The National Power Corporation bought the power barges from a Japanese firm, Hitachi Zosen Corporation. These barges were used to help ease a severe power shortage in the Philippines, providing the required support in the Visayas and Mindanao regions.


Commissioned in 1981, PB 101 and PB 102 are currently moored at Bo. Obrero, Iloilo City, while PB 103 and 104, which were commissioned in 1985, are moored at Botongon, Estancia, Iloilo, and at the Holcim Compound, Ilang, Davao City, respectively.


Since they began operation, these barges had been moved to various locations to meet technical requirements "usually a power shortage" or to provide reactive power support to improve voltage regulation at the end of very long transmission circuits.


Meanwhile, PSALM clarified that the power rates for economic zones is not a matter that only PSALM can undertake. It is a product of a contractual agreement between the power customer, in this case the economic zones, and the power supplier.


After the privatization of most Luzon plants previously owned by the Napocor, PSALM ceased to become the sole supplier of electricity from which the ecozones may procure energy.


PSALM made the clarification in light of the request of the Manila Electric Co. (Meralco), the Philippine Economic Zone Authority (PEZA), and the members of the Semiconductor and Electronics Industries in the Philippines Inc. (SEIPI) to retain the power rate discount inside the economic zones.


Meralco, PEZA, and SEIPI sent separate letters to NPC asking the state-owned company to extend the lower rates until December 2012.


Ledesma said the ecozone rates are a component of the power supply contract between PSALM and Meralco, which will expire on 25 December 2011. Upon expiration of the contract, Meralco will be free to contract with other power generation companies.


“Although we fully understand the possible implications of this decision to the economy, it is no longer reasonable for us to renew the power supply contract with Meralco given the limited supply that PSALM currently has and the high operating costs of generating power from the remaining PSALM-owned plants in Luzon,” Ledesma said.


He added that, “upon expiration of the Meralco power supply contract, the customer is free to contract and negotiate with any power producer. As with any power supply contract, the power rate will depend on the contractual agreement between the parties.”