By Danessa Rivera (The Philippine
Star) | Updated February 5, 2018 - 12:00am
MANILA, Philippines — The Department
of Energy (DOE) has stopped the privatization of the 650-megawatt (MW) Malaya
Thermal Power Plant (TPP) in Rizal as the agency eyes a deeper study before
proceeding to sell the asset, a ranking energy official said.
The DOE’s Electric Power Industry
Management Bureau (EPIMB) has come up with a memo to conduct a study on the
power facility, which will be approved by Energy Secretary Alfonso Cusi, DOE
assistant secretary Leonido Pulido said.
“We feel that the status quo is
safer until we finish the study. The power bureau was given a week to come up
with that memo, and that memo has to be approved by the secretary,” he said.
Conducting a thorough study would,
in turn, further delay the privatization of the Malaya plant, he said.
“I think our stand is that the delay
is reasonable. It would be better to be delayed until we come up with a firm
policy regarding Malaya,” Pulido said.
“We don’t have an immediate
privatization schedule in mind precisely because that study is required before
a firm policy is established,” he said.
State-run Power Sector Assets and
Liabilities Management Corp. (PSALM), the entity created by the Electric Power
Industry Reform Act (EPIRA) to privatize government-owned assets, originally
set the Malaya auction on March 8, 2017 on an “as is, where is” basis.
The sale has been reset to March 30,
2017 and then deferred until further notice to take into consideration the DOE
policy to ensure sufficiency of the power supply in the Luzon grid.
PSALM was directed to include in the
terms of reference Malaya plant’s conversion from running on diesel fuel to
coal or liquefied natural gas to become a baseload plant.
“That’s part of the discussions now,
whether it’s DOE, PSALM or the investor. But right now, we’re leaning towards
DOE footing the bill,” Pulido said.
Under the proposed study, the agency
will determine the importance of the Malaya plant in the power grid and the
financial viability of the conversion to a coal or LNG technology.
“We will determine kung if we really
need the power plant. And if it will be prviatized, is it financially viable to
convert to LNG or coal,” the DOE official said.
Currently, the Malaya TPP—which runs
on diesel—was designated as a must-run unit (MRU) by the DOE to address supply
deficiency when operating power plants in the grid suddenly bog down or become
unavailable.
It will operate as an MRU until the
DOE finalizes its privatization schedule.
However, Pulido said the running the
power plant is very costly for the consumers.
“One of the problems of Malaya is
it’s costly as P8 billion per run, it’s a significant amount and we are
shouldering that as consumers, the cost of running Malaya,” he said.
The state-run firm earlier said it
will seek its board’s definitive policy on the privatization of Malaya plant as
it has yet to receive a final word from the DOE on the natural gas policy which
will be included in the plant’s sale terms of reference.
“The PSALM Board has been
coordinating, cooperating with us. They really want to privatize and their
target is this year. The problem is DOE’s concerns. It has a significant impact
on the grid, in our availability of supply so we have to be very careful about
it,” Pulido said.
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