PSALM to bid out Limay power plant next week

MANILA, Philippines - The Power Sector Assets and Liabilities Management Corp. (PSALM) will proceed with the bidding of the Limay power plant next week.

PSALM said it expects at least three groups to participate in the auction set for Aug. 26, including one that represents foreign interests.

PSALM also said it will rebid the independent power producers administrator (IPPA) for Sual and Pagbilao power facilities on Aug. 28, with six groups signifying their interest to participate.

The bidding of these power facilities, PSALM said, are crucial to attain the open access, wherein big power users would be given a choice where to source their power requirements.

Under the law, PSALM should be able to privatize 70 percent of Napocor’s generating assets in Luzon and Visayas and 70 percent of Napocor contracts through IPPAs before it could proceed with the open access program.

The Aboitiz group and San Miguel Energy Corp. had earlier expressed interest to bid for Limay. But both later on decided not to proceed.

The two power groups, Aboitiz and San Miguel, were also the bidders for the IPPAs of Sual and Pagbilao.

PSALM, however, declared the bidding as a failure saying the two failed to meet the reserve price set by the asset manager for the contracts. It was not known whether the two groups will still bid as IPPAs of Sual and Pagbilao.

The winning IPPAs will manage the contracted capacities of the National Power Corp. in the Sual and Pagbilao power plants, which are 1,000 megawatts (MW) and 700 MW, respectively. Both power facilities are being operated by Team Energy under a build-operate-transfer agreement.

The 1,700-MW aggregate contracted capacities of the two power plants represent around 34.7 percent of the contracted capacity of the IPP contracts for Luzon and the Visayas.

This is 35.3 percentage points short of the 70-percent requirement to privatize the contracted capacities under the IPP contracts to meet the last precondition for open access and retail competition as stipulated by the Electric Power Industry Reform Act.