AC Energy eyes owning government-run hydropower plants

Business World Online
BusinessCompaniesby Lenie Lectura - July 23, 2015

AC Energy Holdings Inc., the power subsidiary of conglomerate Ayala Corp., may participate in the privatization of hydropower plants to be conducted by the Power Sector Assets and Liabilities Management Corp. (PSALM).

“Yes, we are,” AC Energy President John Eric Francia said when asked if the company will take part in the privatization of the remaining assets. “We are interested in hydropower,” he said when asked what particular asset the company is eyeing.

PSALM is the government corporation tasked to privatize state-owned power assets. It took over this task from the National Power Corp.

One of the hydropower plants up for bidding is the Agus-Pulangi hydroelectric power plant in Mindanao, which PSALM is eyeing to sell in 2017.

Aside from AC Energy, Mindanao-based Alsons Power Group also expressed interest to bid for the power complex.

“Agus and Pulangi are interesting prospects…we aim to have a balanced generation mix,” Alsons Vice President for Business Development Joseph Nocos said.

The Agus power complex is strategically located along the Agus River from Lake Lanao in Marawi City to Iligan City. Mindanao residents, however, are opposing the planned privatization, citing the possibility of higher power rates once the private sector takes over.

PSALM also plans to auction off the contract for the independent power producer administrator of the 140-megawatt (MW) Casecnan hydroelectric power plant in Nueva Ecija and the 720-MW Caliraya-Botocan-Kalayaan (CBK) power facility, which Aboitiz Power is also eyeing.

The CBK facility utilizes pump-storage technology. Francia said the company is more inclined to acquire a hydropower asset rather than operate it only. “We go for owning the asset,” he said. This means that AC Energy will likely participate in the Agus-Pulangi power-complex bidding but not the CBK and Casecnan assets.

AC Energy is already involved in other renewable-energy projects, such as the 52-MW wind farm in Bangui, Ilocos Norte, under Northwind Power Development Corp. (Northwind) and 81-MW wind farm in Pagudpud, Ilocos Norte, through its affiliate North Luzon Renewable Energy Corp. (NLREC).

Combined, Northwind and NLREC put Ayala’s total wind-power capacity at 133 MW. “We are waiting guidance from the DOE [Department of Energy] on its next directive for wind projects. For NLREC, it has the capacity to increase by around less than double the size,” Francia said.

The company earlier dropped plans to develop solar-power projects but Francia said the company remains on the lookout for opportunities.

“We shelved our solar project in Mindanao but we continue to monitor the developments in solar, particularly the drop in solar-power panel prices. We can’t ignore these developments. We continue to study the prospects basically for our medium to long-term plans,” he said. source