PSALM plans to rehabilitate Agus-Pulangi hydro power plant

MANILA, Philippines - Power Sector Assets and Liabilities Management Corp. (PSALM) is targeting to rehabilitate the aging 982-megawatt Agus-Pulangi hydroelectric power plants (HEPP) next year to coincide with the oversupply scenario in Mindanao.

Agus’ rehabilitation is critical to improve the value of the plant as it is among the remaining government assets set for privatization, PSALM OIC Lourdes Alzona said in an interview last week.

The state-run agency is trying to take advantage of the period next year when Mindanao would have excess capacity, Alzona said.

“We should start in 2018 since the rehabilitation process will take months. The process will take longer depending on the upgrades needed, which units will undergo rehab first because we can’t do it all at once,” she said.

Out of the six units, the company official said Agus Units 6 and 7 are the ones needing most attention and upgrades.

Earlier, Finance Secretary Carlos Dominguez, who chairs PSALM, said rehabilitating the Agus-Pulangi HEPP is the top priority before undertaking any privatization process for the facility.

Currently, the Agus-Pulangi HEPP can only supply 40 percent of its total nameplate capacity to the Mindanao grid. However, it is considered as the cheapest power source in Mindanao, with capacity being sold at around P2.70 per kilowatt-hour.

PSALM hopes to bid out the contract to undertake the rehabilitation of Agus, which should start next year.

It is also exploring a number of options for its privatization mode. “After the rehab, we can bid out its operations and management or sale of energy. We have identified a number of options,” Alzona said.

The agency has partnered with International Finance Corp. to determine the best way to privatize the Mindanao power asset.

The Joint Congressional Power Commission (JCPC) has previously ordered the state-run firm to fast-track the study aimed to determine the best way to privatize the Agus-Pulangi HEPP in Mindanao.

Puwersa ng Bayaning Atleta party list Rep. Jericho Morales raised JCPC’s need to know privatization plans for Mindanao power asset.

The feasibility study will be critical in JCPC’s recommendation on how the facility will be privatized, Sen. Sherwin Gatchalian said.

Under Republic Act 9136 or the Electric Power Industry Reform Act of 2001, the hydropower complex should be privatized 10 years after the passage of the law. JCPC, as the oversight committee, will have to set the directions for the power facilities.