Sale of 7 Napocor power plants set in July

The Power Sector Assets and Liabilities Management Corp. (PSALM) will start the sale of at least seven power plants of the National Power Corp. (Napocor) by July this year.

"These (power plants) represent the first batch of generation assets of Napocor that we will sell by the start of the third quarter," PSALM president Edgardo del Fonso said in an interview.

Among the power facilities to be auctioned off in two months’ time are those in Sucat, Limay, Navotas, Pinamucan, two mini-hydro plants in Mindanao and 1 small diesel plant in Bohol.

The sale of these power generation facilities is expected to follow shortly after the privatization of the National Transmission Corp. (Transco).

The auction to choose a concessionaire that will operate Transo is expected to be concluded by July this year.

According to del Fonso, the Sucat and Limay power plants are to be converted into natural gas facilities. "We have included these two plants (Sucat and Limay) in the first batch because these will be converted into natural gas plants," he said.

Del Fonso said the other power plants were considered to be included in the first batch because these are already expired contracts such as the Pinamucan and Navotas.

The other small plants, he said, are currently not being used. "We might as well sell them since we are not using them," he said.

He said they are also trying to determine if they will still include Malaya diesel-fired power plant in the first batch of assets to be sold.

"We are still studying the economic viability of selling the Malaya power plant. It appears that the cost of converting the plant into a gas-fired facility is expensive. But we will still have to look at it," he said.

Sucat, Limay and Malaya are fuel-based plants which are being eyed for conversion into gas-fired facilities to serve as anchor load and justify the construction of a gas pipeline from Batangas to Manila and Bataan to Manila.

Sucat is a 600-megawatt (MW)diesel-fired power plant located in Paranaque which had been decommissioned while Limay has capacity of 620 MW gas turbine also run by diesel.

Malaya 1 and 2 oil thermal power plants are located in the town of Pililla, province of Rizal. Both power plants are owned and managed by Napocor. Malaya 1 which has a capacity of 300 MW, was commissioned in September 1975 while Malaya 2 started commissioning on March 1979.

The PSALM chief said they have yet to firm up the valuation of the entire first batch of assets. "We have not yet come up with the valuation but I guess this will not reach a fourth of the expected proceeds from the sale of the generation assets," he said.

The government, which expects to raise about $2 billion from the sale of the generation facilities of Napocor, is fast tracking the sale of the power plants to be converted into natural gas facilities for the development of the downstream natural gas industry in the country.

The electricity to be generated from these converted gas-fired power plants are already included in the Power Development Plan of the Department of Energy for 2008.