Energy department mulls options for Agus-Pulangi privatization

Posted on October 10, 2016
http://www.bworldonline.com/content.php?section=Corporate&title=energy-department-mulls-options-for-agus-pulangi-privatization&id=134612

THE Department of Energy (DoE) is looking at other options on how Mindanao’s main power source, the Agus-Pulangi hydroelectric plants, will be privatized.

Energy Undersecretary Felix William B. Fuentebella said the department is considering the transfer of the hydropower complex to PNOC Renewables Corp. (PNOC RC), a subsidiary of DoE-attached agency Philippine National Oil Co. (PNOC)

“We will present that as one of the options, but it’s still the call of Congress,” he said.

Finance Secretary Carlos G. Dominguez III had earlier directed the DoE to hasten the sale of the power plants, which are managed by state-owned Power Sector Assets and Liabilities Corp. (PSALM). Republic Act 9136 or the Electric Power Industry Reform Act of 2001 (EPIRA) calls for their transfer to private hands.

As Finance chief, Mr. Dominguez is chairman of the PSALM board, while Energy Secretary Alfonso G. Cusi is one of the board members.

Mr. Fuentebella said the law calls for a consultation with Mindanaoan lawmakers at the House of Representatives before any privatization could place. The dialogue should include how the sale will be done, he added.

“Ang punto naman nila ay gusto nilang maging government-owned [Their point is to make the plants government-owned],” he said, adding that lawmakers have an option to legislate a state entity called Mindanao Power Corp. (Minpocor). “We are also saying that you also look into the current GOCCs [government-owned or controlled corporations] under the [DoE].”

Mr. Fuentebella said the option was raised to avoid creating another state agency, which was what the Mindanao Development Authority (MinDA) had suggested.

Romeo M. Montenegro, deputy executive director of MinDA, last month said was expecting a bill to be filed to legislate the creation of Minpocor to take over the management and ownership of the Agus and Pulangi hydropower facilities.

Mr. Montenegro explained that the plan was to spin off the facilities from PSALM and transferred to government-owned Minpocor for an amount, which he said would be “at market price.” The move would ensure that revenues derived from the plants are ploughed back to Mindanao, he said.

Mr. Fuentebella said Mr. Cusi had given instruction to study the option of using PNOC RC as the receiving entity.

“As far as PNOC RC is concerned from source to end, it’s there. So it’s capable,” the DOE spokesperson said, adding that he looked at the financial and nonfinancial provisions of the proposed bill to compare them with the company’s charter.

But Mr. Fuentebella maintained it is still up to Congress and the other PSALM board members -- the secretaries of the Departments of Budget and Management, Justice, and Trade and Industry. The director-general of the National Economic and Development Authority and the head of PSALM complete the board.

The Agus hydro complex has an installed capacity of at least 700 megawatts (MW), with the biggest coming from Agus VI in Iligan City, Lanao del Norte. Agus III, the only one of the seven hydroelectric power projects along the Agus river that was not completed, is among MinDA’s list of upcoming renewable energy projects.

Pulangi IV hydroelectric power plant in Maramag, Bukidnon has three units each with a rated capacity of 85 MW. It is the first completed project of six facilities envisioned along the Pulangi river. -- Victor V. Saulon