PSALM turns over Sual, Pagbilao power plants

The Power Sector Assets and Liabilities Management Corp. (PSALM) said the turnover was held a few months after PSALM successfully conducted last August 28, 2009 the second round of bidding for the appointment of IPPAs to administer the contracted capacities of Napocor in the Sual and the Pagbilao power facilities.

PSALM last August declared the SMEC and Therma as the winning bidders and to become the independent power producer (IPP) administrators for Sual and Pagbilao, respectively.

In the IPPA agreement between PSALM and SMEC and Therma Luzon, the IPPAs will be the one to handle the procurement of the power plant?s fuel requirements.

SMEC offered US$ 1.072 billion for the management and control of Napocor?s 1,000 megawatt (MW) contracted capacity of the Sual while Therma Luzon tendered US$ 691 million for the Pagbilao plant.

The winning IPPAs will also manage the contracted capacities of the Napocor in the Sual and Pagbilao power plants. 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.

The turnover of the management of the contracted capacity of the Sual power plant was conducted at 12 midnight of Nov. 6, 2009 in Pangasinan through a meter reading of the power generation and an inventory of the coal and oil supply as stipulated in the Administration Agreement.

The meter reading was held to verify the quantity of electricity delivered by the IPP to the grid reckoned from the time SMEC, as administrator, took over the management of the contracted capacity of the Sual facility.

The same procedure was carried out at the Pagbilao plant in Quezon at 12 midnight of 01 Oct. 1, 2009.

Both activities were witnessed by officials and representatives from the National Grid Corporation of the Philippines, SMEC for Sual, Therma Luzon for Pagbilao, National Power, and PSALM.

The turnover grants SMEC and Therma Luzon the authority to administer the trading of the power produced by their respective power facilities in the Wholesale Electricity Spot Market (WESM), thereby spurring competition in the electricity market.

Aside from trading their power output in the WESM, SMEC and Therma Luzon will be responsible for procuring coal and other fuel for their power plants, and closely coordinating with the plant operators to ensure that the power they generate matches their respective bids.

With the successful appointment of the Sual and Pagbilao IPPAs, PSALM is set to bid out Napocor?s contracted capacities in the 345 MW San Roque Multipurpose Hydroelectric Power Plant, the 70 MW Bakun Hydroelectric Power Plant, and the 30.75 MW Benguet Mini-Hydro power plants, which are all located in Northern Luzon. Nine bidders are expected to participate in the bidding scheduled on 11 December 2009.

PSALM is targeting to transfer the management and control of at least 70 percent of the total energy output of the IPP power plants under contract with National Power to the IPPAs by 2010. PSALM has so far achieved 34.66 percent of this target.

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