PSALM to cut Mindanao supply by 290MW

by Myrna Velasco – January 4, 2016

from Manila Bulletin

Power capacity that will be supplied by the Power Sector Assets and Liabilities Management Corporation (PSALM) to its off-takers (buyers) will be cut by 290 megawatts this year, according to company president and chief executive Lourdes S. Alzona.

She stressed that this was mainly be due to the privatization of power contracts and operating assets in the grid.

“The reduction in Mindanao customers’ allocation totaled 290 megawatts,” Alzona said. As previously reported, the aggregate capacity that PSALM can contract out to Mindanao power buyers may just hover at 655 megawatts for 2016.

The company has already indicated that this shall merit revisions in the terms of its contract for the supply of electric energy (CSEE) with 49 power off-takers in Mindanao, comprising mainly of electric cooperatives and large industrial customers.

Its capacity decline, according to Alzona, can be attributed to the privatization of the 108MW Mt Apo geothermal asset; the expiration of its supply contracts for the 100MW Western Mindanao Power Corporation (WMPC) and 50MW Southern Philippines Power Corporation.

The PSALM president also qualified that the 32MW capacity of Power Barge 104 has been excluded in the allocation.

The state-run firm has been continuously pushing for the privatization of its remaining assets in Mindanao – the next one on the auction block would be the supply contract of the 210MW coal-fired power plant in Misamis Oriental. It is being offered to prospective independent power producer administrator or IPPA.

The Agus hydropower complex and the Pulangui facility are similarly planned for divestment, but the intense opposition of some groups in the region had been blocking the government’s intent.

The decision on the hydropower plants’ privatization had already been tossed to the next administration – with them crafting the preferred mode of asset divestment as well as the implementation timeframe.

PSALM’s dwindling capacity contracting though may not necessarily come too dismal for Mindanao consumers as new capacity additions from greenfield plants are already expected on stream this year.

The first block of the 300MW Davao coal-fired power plant of the Aboitiz group is already on commercial operations; while the next ones would be the 105MW Sarangani coal plant of the Alsons group; the preliminary phase of the 300MW San Miguel coal plant; as well as the initial 135MW coal plant of the Filivest group in Misamas Oriental.