Napocor temporarily shuts down Masinloc power plant

The National Power Corp. (Napocor) decided yesterday to shut down temporarily its 600-megawatt (MW) coal-fired power plant in Masinloc, Zambales due to an ongoing dispute between the power firm and the tenants living in the area.

"We were forced to implement a force majeure shutdown due to the shortage of hydrochloric acid which is used for the production of demineralized water for steam production. This is due to the barricade at the site starting Dec. 8, 2002," Napocor acting president Roland Quilala said.

Quilala said as a result of the shutdown, the estimated revenue loss would amount to P4.9 million a day excluding the start-up cost of about P700,000.

Masinloc plant manager Eugene Alfonso, said the tenants who have been demanding additional compensation have been harassing plant personnel and have set up a road block. "As a result, all transport leading to the plant has been cut off," Alfonso said.

At the time of the shutdown, Quilala said Masinloc’s two units were operating at their dependable combined capacity of 600 MW.

"If the road block will be removed, delivery of hydrochloric acid will take two days, and another four days to restore operation. So Masinloc will be out of operation for a minimum of six days," Quilala said.

The Napocor chief said the Sual coal-fired power plant, owned and managed by Mirant Philippines Inc., will step up its production to cushion the impact of the Masinloc shutdown. Sual has two units running at 680 MW. The plant’s capacity is 1,200 MW.

The Masinloc power plant was among the coal-fired power plants programmed by the government to add 1,975 MW of additional capacity of 2005.

Masinloc I was built at a cost of $108 million and ¥26.42 billion by Mitsubishi Corp. and was funded through a $200-million loan from the Asian Development Bank and a $150 million loan from the Japan Export-Import Bank (Jexim). The second unit was financed through a loan of $102 million each from the same lending institutions.

Since May this year, the Masinloc power plant has been experiencing problems as local residents in the area, who are asking for additional disturbance compensation, have been blocking all major entrances to the plant.

Napocor said it has extended a total of P363.1 million in financial assistance to the province of Zambales, host to Masinloc power plant.

On top of this, tenants in Masinloc were given an additional compensation package equivalent to one year (P30.8 million) after then President Fidel V. Ramos visited the plant site before its inauguration.

The state-run power firm has also remitted a total of P18.38 million for the year 2001 alone in franchise taxes before it was ordered by the Solicitor General to suspend paying such tax to its host communities pending the results of the ongoing case before the Supreme Court.

The residents, however, are demanding that Napocor should give additional compensation package equivalent to five years amounting to P154 million.