PSALM prepares to sell more power plants this year to meet obligations

By Alena Mae S. Flores – January 16, 2018 at 06:50 pm

POWER Sector Assets and Liabilities Management Corp. said it will sell more assets this year to reduce operational costs and raise funds for debt repayment.

PSALM, which is tasked under the Electric Power Industry Reform Act of 2001 to manage the assets and liabilities of National Power Corp., said in a statement the move to aggressively pursue the privatization program would benefit the government and the electricity end-users.

The privatization agency said it would seek the board’s definitive policy on the privatization of state-run 620-megawatt Malaya Thermal Power Plant in Pililia, Rizal and the 210-megawatt Mindanao Coal-Fired Power Plant in Misamis Oriental.

“The sale of Malaya plant was previously deferred because of the plan of the Department of Energy to convert it into a liquefied natural gas plant. PSALM 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,” PSALM said.

Energy Secretary Alfonso Cusi earlier said he wanted to convert the Malaya diesel power plant into an LNG facility.

“For Mindanao Coal, the sale of which was deferred in 2015, PSALM may further await an appropriate time to offer the plant on the sale block,” PSALM said.

“Reprieved from power outages in recent years, Mindanao, this time, is currently experiencing oversupply of electricity following the entry of new power plants. Under this circumstance, PSALM deems that the plant may not attract maximum investment,” the company said.

PSALM said it would continue to manage, trade and sell the energy output of the Unified Leyte Geothermal Power Plant including the 40-MW ‘strip of energy’ under Phinma Energy Corp.’s administration.

PSALM and Phinma Energy recently terminated the independent power producer administration agreement for the Unified Leyte power plant.

“PSALM may no longer subject the plant to public bidding as its independent power producer contract will be expiring in 2021-2022,” it said.

PSALM said it was also keen on commencing the rehabilitation of the 982-megawatt Agus-Pulangi Hydroelectric Power Plants in Mindanao to extend the facilities’ service life by 30 more years and to increase the plants’ reliability and availability.

“As the owner, PSALM must have laid down by 2019 the feasibility, terms of reference including funding options and overall groundwork for the project. As the operator, the National Power Corporation will implement the project,” it said.

PSALM will also prioritize this year the sale of 231 lots as a part of its real estate asset privatization program. PSALM’s land properties include 6,160 lots with an aggregate area of about 10,000 hectares.

Lined up for public bidding are eight lots (20,975 sq.m) of Manila Thermal Power Plant and 92 lots (257,995 sq.m) of Bauang Diesel Power Plant.

Interested bidders have until Jan. 22, 2018 to conduct due diligence for said properties while submission of bids is set on Jan. 24, 2018.