PSALM says bidding for Mindanao Coal bulk energy may have to wait

by Lenie Lectura – December 1, 2015

from Business Mirror

THE Power Sector Assets and Liabilities Management Corp. (PSALM) has suspended the auction for the selection and appointment of the Independent Power Producer Administrator (IPPA) for the bulk energy of the 200-megawatt (MW) Mindanao Coal-Fired Thermal Power Plant (Mindanao Coal).

PSALM President Lourdes Alzona said a new bid schedule would be set next year, adding that the decision was made after the Department of Energy (DOE) appealed to defer the bidding, amid the tight power supply being experienced in Mindanao.

“Mindanao Coal has been deferred, taking into consideration the power-supply outlook because of the El Niño phenomenon and the target schedule for commissioning of new capacities in 2016,” said Alzona in a text message, when asked for updates on the new bidding schedule.

Alzona said PSALM fully supports the position of the DOE to reschedule the bidding on a later date, when power-supply outlook is already at a comfortable level.

The power plant supplies about a fifth of Mindanao’s power requirements. An early auction, at a time when supply is tight, could cause price shocks. DOE officials explained that the IPPA’s winning bidder might dictate electricity rates, which, in turn, could translate to higher electricity prices for consumers.

Located in Misamis Oriental, the Mindanao Coal plant was constructed in 2006 for a 25-year Power Purchase Agreement under a build-operate-transfer (BOT) scheme that ends in 2031 with Steag SPI.

The power plant is 51-percent owned by Steag; 34 percent, AboitizPower; and 15 percent, La Filipina.

PSALM earlier met with the 12 prospective bidders for the Mindanao Coal, namely, 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.; SMC Global Power Holdings Corp.; SPC Power Corp.; Team (Philippines) Energy Corp.; Therma Southern Mindanao Inc. (TSMI); and Vivant Energy Corp.

The agency was supposed to bid the IPPA contract on November 25 and award it to the winning bidder in February next year.