PSALM resets auction of Malaya thermal-power plant

By Lenie Lectura – March 29, 2017

from Business Mirror

THE Power Sector Assets and Liabilities Management Corp. (PSALM) has postponed the auction of the 650-megawatt Malaya thermal-power plant.

The power facility was supposed to be sold on Thursday, March 30, to four interested bidders who earlier submitted letters of interest to PSALM. On Wednesday PSALM Officer in Charge Lourdes Alzona said “the auction is deferred until further notice”.

She did not provide further details.

Alzona said earlier the final transaction would take into consideration the requirement of the Department of Energy (DOE) to convert the plant into a liquefied natural-gas (LNG) facility.

Energy Secretary Afonso G. Cusi, who sits as PSALM vice chairman of the board, wants the winning bidder of the power asset to convert the Malaya plant into an LNG plant.

In the planned conversion, Cusi cited the need for more power-generating capacity, particularly base-load power, which is defined as power that runs 24/7.  LNG, Cusi said, has been identified as base load.

“What I am trying to say is, even after privatization, we would not run out of power. The country still has to source power, so why not convert it to LNG, so we can have base-load power? It’s an expression of concern on my part. The winning bidder may just operate Malaya as it is, so why not convert it to a superior technology that will qualify as base load?” Cusi said.

The four bidders are APT Global Inc., Phinma Energy Corp. Riverbend Consolidated Mining Corp., and AC Energy Holdings Inc.

AC Energy President Eric Francia said on Wednesday his company has yet to receive a formal notice from the agency about the new requirement.

“If the Department of Energy believes the location is most suitable for an LNG, then we will not complain as to why they are changing the rules,” he said. But should the DOE decide to convert it into an LNG plant, “that’s another question”.

Francia said the proposal to require the winning bidder to convert the Malaya plant to an LNG plant after the bid rules were issued is “already a material change”.

Perhaps, he said, it would be “safer” for the government to rebid the power plant.

“It’s a restriction as opposed to an enhancement of a bid,” Francia said.

The Malaya plant was rehabilitated in 1995 by the Korea Electric Power Corp. under a 15-year rehabilitate-operate-manage-maintain agreement. It consists of a 300-megawatt (MW) unit with a once-through type boiler and a 350-MW unit fitted with a conventional boiler.

PSALM t manages the assets and liabilities of the National Power Corp. as mandated by the Electric Power Industry Reform Act of 2001. It will also undertake the bidding process for
the plant.