Alsons urges govt to sell output, not assets, of Mindanao power plants

By Lenie Lectura – January 8, 2018
from Business Mirror

AN official of Alsons Consolidated Resources Inc. (ACR) believes the best way to privatize hydroelectric power plants along the Agus and Pulangi Rivers in Mindanao is to sell the power-generating plants’ output rather than sell the assets.

“Perhaps, the government can consider privatizing not the physical assets but per kilowatt-hour [kWh] generation, similar to the strips of generation capacity like what was done in Leyte,” said Joseph Nocos, ACR vice president for business development.

Nocos was referring to the privatization of the Unified Leyte Geothermal Power Plants (ULGPP) conducted by the Power Sector Assets and Liabilities Management Corp. (PSALM), the agency tasked to manage state-owned power assets and is operated by state-run National Power Corp.

PSALM turned over the ownership of the government’s contracted capacities in these power plants to various Independent Power Producer Administrator, which now has the right to sell the capacity of the ULGPP.

Nocos said this kind of approach would address some of industry stakeholders’ concerns that privatizing the assets will “undermine the patrimony of Mindanao.”

He also believes that government’s goal of privatizing the asset and raising the money from operation and management of power plants would be achieved.

“I think if you sell the energy first you can proceed with the rehabilitation soon,” Nocos said.

PSALM earlier said it plans to rehabilitate the 982-megawatt (MW) Agus-Pulangi hydro plants then bid out the operation and management of the assets thereafter.

Currently, the hydropower plants supply only 40 percent of its total nameplate capacity to the Mindanao transmission grid despite being the cheapest power source in the region with sales at around P2.70 per kWh.

The Agus complex has 727-MW installed capacity, while Pulangui’s capacity is at 255 MW. However, both facilities already have derated generation.

Meantime, ACR awaits for the release of the terms of reference.

“I would say we are interested in such a big project,” ACR Chairman Tomas Alcantara earlier said.