DOE boss wants to suspend auction of CBK hydro plant

by Lenie Lectura, 14 June 2015
from BusinessMirror

ENERGY Secretary Carlos Jericho L. Petilla wants to suspend the privatization of the 727-megawatts (MW) Caliraya-Botocan-Kalayaan (CBK) hydropower facility which the Power Sector Assets and Liabilities Management Corp. (PSALM) has scheduled for auction in 2016. Petilla strongly believes the CBK should remain as the government’s regulating power reserve.

“I feel that it should not be privatized because it is the only asset left in this  country that serves as regulating reserve. It’s the best defense this country has to regulate the grid,” Petilla said.

PSALM intends to privatize the CBK hydropower facility in the second half of 2016. Likewise, the state firm has set the indicative turnover of the administrator of the CBK contracts by the first semester of 2017.

If Petilla, vice chairman of the PSALM board, would have his way, “I would defer the auction.” He said it is because of CBK that Luzon was able to avert a power outage.

“We did not have brownouts because of that. CBK remains the only regulating asset in this country that its main use is for security.”

Sergio Osmeña III, chairman of the Senate Committee on Energy, said in March that Luzon has found a new source of power-generation capacity and electricity consumers can count on this to augment the power supply even beyond the summer months of 2015.

He said the CBK pump-storage power plant in Laguna province would run at its full capacity during the dry months to help address an anticipated power shortage. “The NGCP [National Grid Corp. of the Philippines] has energized the Lumban line. So CBK will now give us 720 MW, not only for three months this summer, but forever,” Osmeña had said. Due to line constraints and other issues, the CBK is only able to deliver around 300 MW.

“I personally went there to ask why CBK is not running at its full capacity. The answer I got was because, aside from the transmission line, the resorts nearby would complain if water level will increase.

So we talked to the resort owners and owners of small houses there and told them they will be compensated if they will relocate. CBK was created as a pump storage and not as a resort lake,” Osmeña said.

The Senate had earlier proposed to declare CBK plants as “must run” units during peak hours to achieve the desired water elevation of the Caliraya Lake and optimize the existing output of the said units.

The Senate then urged the Department of Energy to declare all CBK pump-storage power plant units as “must load” units from 8 p.m. to 8 a.m. from Monday to Saturday and Sunday, if and when requested by PSALM, and as “must run” units during peak period hours to achieve the desired water elevation of the Caliraya Lake and optimize the existing output of the said units.

PSALM is the agency mandated by Republic Act 9136, or the Electric Power Industry Reform Act of 2001, to handle the sale of the remaining state power assets and financial obligations of the National Power Corp.

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