PSALM assures financial closing of Calaca power plant sale

The Power Sector Assets and Liabilities Management Corp. (PSALM) has assured it would soon complete the financial closing for the sale of  the 600-megawatt (MW) Calaca coal-fired power plant.

“All parties concerned are working to close the transaction according to schedule,” Helena C. Tolentino, PSALM vice president for contracts management and corporate services, said.

She made the assurance to allay concerns the sale of the coal-fired facility for about $800-million will not be consummated, putting the government at a disadvantage.

According to Tolentino, the closing of the transaction for the sale will be in accordance with the transaction documents for the sale.

The Calaca plant was bid out on Oct. 16, 2007 with the Emerald Energy emerging as the highest bidder with its offer of $786.53 million. Emerald is owned by Belgian utility giant Suez-Tractebel through its wholly-owned subsidiary Belgelectric Finance B.V.

In a related development, PSALM said the allocation of transition supply contracts (TSCs) to power plants has yet to be privatized, including those covered by independent power producer (IPP) contracts, would ease the pressure on the prospective owners of the power plants to get buyers for their generated electricity.

The allocation of TSCs was required by the governing boards of PSALM and National Power Corp.

In the case of power plants covered by IPP contracts, the electricity generated by these plants is delivered to Napocor which supplies the same to its various customers.

When TSCs are assigned to the IPP administrators (IPPAs), the counterparties of the assigned TSCs will get their electricity from the IPP, and the corresponding supply requirement will form part of the portfolio of the IPPAs.

Under the Electric Power Industry Reform Act, PSALM will select IPPAs through bidding. The selected IPPAs will then administer and manage the contracted energy output of PSALM’s IPP contracts.

With the assignment of TSCs, IPPAs will sell the output from their respective IPP plants to the customers covered in the corresponding TSCs.

PSALM clarified that supply agreements would be allocated beyond the IPP plants’ contract levels. This can only happen if Napocor contracted to sell more electricity than it could actually supply, which is unlikely.    — Donnabelle Gatdula