Govt offers more state-owned power plants

MANILA, Philippines - The government today opens the sale process for two more power plants but has moved plans to auction off another facility to next year given a legislative hurdle. The Power Sector Assets and Liabilities Management Corp. (PSALM), in a statement, said the bid invitation for the 146.5-megawatt (MW) Panay and 22-MW Bohol diesel power facilities would be released today. The planned auction for the 192.5-MW Palinpinon geothermal plant, however, will be moved to 2009 given a congressional panel’s failure to approve a steam supply agreement. For the Panay and Bohol facilities, PSALM said prospective investors have until July 30 to submit letters of interest. A non-refundable fee of $2,000, a confidentiality agreement, and an undertaking with PSALM will have to be forwarded two days later. Qualified investor groups will be allowed to conduct due diligence from July 17 to October 27, 2008. A pre-bid conference will be held on August 6 while the actual auction will be staged on October 29. Palinpinon was originally packaged with Panay but the Joint Congressional Power Commission’s failure to approve a long-term steam supply deal prompted the PSALM board to move the plant's sale to 2009. PSALM formally announced the withdrawal of the package in a supplemental bid bulletin issued last July 3. Palinpinon in Valencia, Negros Oriental supplies 60 MW to Panay. It also handles some 18-20% of demand in the Cebu-Negros-Panay-Bohol-Leyte-Samar Grid. The Panay facility, meanwhile, consists of the 36.5-MW Panay 1 Diesel Power Plant and the 110-MW Panay 3 Diesel Power Plant. Both located in Dingle, Iloilo. Panay 1 and 3 plants are the only land-based facilities of National Power Corp. (Napocor) on in the island. They are peaking plants, meaning they operate mainly during peak hours. The Bohol plant, located in Tagbilaran City, was Napocor’s first diesel plant. It consists of four 5.5-MW identical generating units. PSALM has to date sold 49.82% of Napocor’s capacity. It is targeting to sell the 89-MW Tiwi and 458.5-MW Makban geothermal power plants later this month. A successful sale would allow the agency to achieve a targeted 70% privatization requirement. The sale of the state’s power assets is mandated by the Electric Power Industry Reform Act of 2001. The 70% floor is one of the requirements for open access, where customers will be allowed to choose their electricity supplier, leading to more competitive power rates.