Full steam ahead for sale of power assets, capacities, says Energy Sec Almendras

MANILA, Philippines — Energy Secretary Jose Rene D. Almendras has assured energy stakeholders that there will be no further delays in the government’s sale of the remaining power generation assets and contracted capacities, as the bidding will resume by the middle of the year.

Despite opposition from certain members of the Congress, Almendras was firm in his pronouncements that the biddings would push through by July this year, starting off with the independent power producer administrator (IPPA) contract for the 149-megawatt Naga power facility.

The IPPA contract for the 640-MW Unified Leyte geothermal complex will likewise be pursued within the third quarter this year, despite a pending House bill that sought the deferment of the auction, according to Almendras.

Rep. Lucy Torres-Gomez earlier filed House Bill No. 1937, seeking the deferment of the IPPA bidding for these geothermal facilities and the amendment of the Electric Power Industry Reform Act, which governs the privatization of the government’s contracted capacities in IPPs.

The sale of the Agus-Pulangi hydropower complexes in Mindanao will likewise push through, although no definite date has been set yet. Almendras disclosed that the DOE has begun talks with the Congress for the privatization of these hydropower facilities, which supply over half of Mindanao’s electricity requirements.

The auctions will still be conducted by state-run Power Sector Assets and Liabilities Management Corp., which has been tasked under the Electric Power Industry Reform Act to privatize the government’s energy assets and also manage the ballooning liabilities of another government firm, National Power Corp. (Napocor).

The energy chief expects the sale of all the government-owned power facilities and contracted capacities to be completed within five years’ time, after which PSALM will be spun off to become part of the Department of Finance.

Apart from stimulating competition in the energy market, the sale of these assets is meant to raise the much needed funds to pay off Napocor debts, which stood at a staggering $15.8 billion as of the end of 2010, down slightly from the previous year’s $16.5 billion.

So far, PSALM has managed to collect $4.85 billion from the sale of power assets, of $4.84 billion were used to pay off Napocor’s obligations. It has yet to collect $16.07 billion more from the privatization proceeds until 2029.