Contract bidding for Mindanao coal plant deferred to next year

MANILA, Philippines - The bidding for the privatization of the output of the 210-megawatt (MW) Mindanao coal-fired power plant in Misamis Oriental will be deferred until after summer next year, when the power supply situation stabilizes in the region, a Department of Energy (DOE) official said.

It was decided earlier this month by the board of Power Sector Assets and Liabilities Management Corp. (PSALM) to defer the bidding to next year, DOE OIC-Secretary Zenaida Monsada said.

“Bidding was supposed to take place in November and the awarding in February. But that has now been deferred,” she said.

Monsada explained the plant’s independent power producer administrator (IPPA) should be auctioned when the supply situation is stable.

The DOE official noted the auction could happen summer next year.

“Bidding will take place after summer next year because during summer, supply situation is still uncertain,” Monsada explained.

This is the second time the auction for the IPPA of the Mindanao plant has been reset.

Last month, PSALM president and CEO Lourdes Alzona announced the agency has pushed back the bidding to Nov. 25 from Sept. 23 in consideration of the DOE directive to defer the Mindanao Coal IPPA selection and appointment.

The DOE had said privatizing the management of the plant’s output could lead to higher electricity rates amid the power supply shortage in Mindanao.

Six groups have expressed interest in the Mindanao Coal IPPA, one of them being a partnership between Aboitiz Power Corp. and Negros-based grains trader and miller La Filipina Uy Gongco Corp.

The plant, located in Misamis Oriental, is operated by Germany’s Steag State Power Inc. under a 25-year build-operate-transfer (BOT) power purchase agreement scheme until 2031.

Currently, Steag owns 51 percent of Steag State Power, with AboitizPower owning 34 percent and La Filipina the remaining 15 percent.

Steag State Power operates the Misamis Oriental plant, which was constructed under a build-operate-transfer agreement with the government.