State-run Power Sector Assets and Liabilities Management Corp. (Psalm) has deferred the privatization of a 210-megawatt (MW) coal-fired power plant in Misamis Oriental.
Zenaida Monsada, Department of Energy (DOE) officer-in-charge (OIC), said the Psalm Board has agreed to defer the auction of the independent power producer administrator (IPPA) contract for the Mindanao coal plant.
Psalm originally set the bidding for the IPPA contract of the Misamis plant on November 25 this year and award it by February next year on the view that capacity in Mindanao will stabilize next year.
Prior to the deferment, the DOE had warned Psalm that privatizing the IPPA contract for this year would only result in higher electricity costs for residents of the region.
“It is not good to bid out the IPPA contract now because the capacity is not that stable,” Monsada told reporters on Monday.
Psalm President Lourdes Alzona earlier said that six companies had signified to join the bidding process for the IPPA contract.
Located in Misamis Oriental, the coal plant is operated by German-led Steag State Power Inc. under a 25-year build-operate-transfer (BOT) power purchase agreement scheme until 2031.
Germany’s Steag AG owns 51 percent of Steag State Power, with AboitizPower owning 34 percent and La Filipina Uy Gongco Corp the remaining 15 percent.
Earlier this year, Psalm set a deadline of April 13 for the payment of the nonrefundable participation fee and execution of a Confidentiality Agreement and Undertaking (CAU) and conducted a pre-bid conference on May 6 in preparation for the bidding proper that was to be held September 23.
But it later announced it was pushing back the bidding to November 25 after considering the DOE’s directive to defer the auction.
Psalm is tasked to take ownership of all existing generation assets, liabilities, Independent Power Producer (IPP) contracts, real estate and all other disposable assets of the National Power Corp. (NPC).
It manages the orderly sale, disposition, and privatization of these NPC assets with the objective of liquidating all NPC financial obligations and stranded contract costs in an optimal manner.