DOE wants privatization of 200-MW Mindanao coal plant pushed to 2016

by Lenie Lectura, 10 May 2015
from BusinessMirror

ENERGY Secretary Carlos Jericho L. Petilla wants to push back the privatization of the supply contracts for the output of the 200-megawatt (MW) Mindanao coal-fired plant to next year from September this year.

The power plant supplies about a fifth of Mindanao’s power requirements. Petilla is concerned that an early auction could result in power-rate hikes.  He said electric cooperatives would be forced to source power from the winning bidder which, in turn, could dictate prices due to lack of competition.

“I want to ask PSALM [Power Sector Assets and Liabilities Management Corp.] to delay the privatization until such time that the power plants of Aboitiz, Alsons or San Miguel have been put up,” Petilla said. The energy chief said a better scenario would be to privatize the contracted capacity of the STeag coal-fired power plant in Misamis Oriental sometime within the first half of 2016 when the new power plants of the power- generation companies are expected to come online. “It’s better to hold off the privatization so that the consumers won’t be burdened only until such time when at least two power plants are up and running which is actually very soon, maybe in the first half of 2016,” Petilla said. Therma South Inc. (TSI), a unit of Aboitiz Power, is building two by 300-MW coal-power plant in Davao.

San Miguel Corp. Davao is also putting up a 600-MW power facility.

Alson’s Sarangani Energy Corp. (SEC) is on track to begin commercial operations in the fourth quarter of 2015 for the first 105-MW section of its 210-MW coal-fired power plant at Maasim, Sarangani. The plant will begin commissioning within the first half of 2016. Alsons Power is also developing the 105-MW San Ramon Power Inc. coal-fired power plant in Zamboanga City.  SMC and TSI are among the 12 prospective bidders eyeing to bag the supply contracts for the output of the Mindanao coal-fired plant. Other interested bidders include Conal Holdings Corp., FDC Davao del Norte Power Corp., FirstGen Northern Power Corp., GDF Suez Energy Philippines Inc., Masinloc Power Partners Co. Ltd., Meralco Powergen Corp., Nexif Pte. Ltd., SPC Power Corp., Team (Philippines) Energy Corp. and Vivant Energy Corp.

These 12 interested bidders are eyeing the selection and appointment of the independent power producer administrator for the Mindanao coal-fired thermal power plant.

PSALM has set the bidding schedule on September 23, 2015. Located in Misamis Oriental, the Mindanao coal plant was constructed in 2006 under a 25-year build-operate-transfer—Power Purchase Agreement scheme with the government.

The power facility is made up of two units with a generating capacity of 105 MW each. It is currently being operated by Steag State Power Inc. of Germany. The cooperation period with the operator officially ends in 2031.