Casecnan hydro plant on forced shutdown since 2021
By Myrna M. Velasco – July 9, 2022, 10:40 AM
from Manila Bulletin
The Department of Energy (DOE) revealed that the 165-megawatt Casecnan hydropower plant had been on forced shutdown since October last year due to “unresoved issues” with the indigenous peoples (IPs) in its host community in Nueva Ecija.
This came to light as the DOE admitted that the facility’s unscheduled downtime due to its social has been dilemma has been contributing to the tightening of power supply in the Luzon grid, which has been experiencing “yellow alert” conditions.
According to DOE Director Mario C. Marasigan, “Casecnan has encountered issues with the IPs…the IPs blocked entry to some components of the hydro facility.”
The energy department cannot give a definitive timeframe yet on when the Casecnan hydro plant can go back to operation, as well as on how long the concerns with the IPs can be resolved.
The Luzon grid, which is also the major power system supporting the country’s economic center, is recurrently plagued with tight supply conditions, resulting in rotational blackouts at times.
The predicament of deficient supply will be the most critical dilemma that will welcome the Energy Secretary to be yet appointed by the Marcos administration on top of the surging fuel prices that have been interminably causing financial pain to the Filipinos, not just at petroleum pumps but also on its domino effect in the electric bills and high cost of basic commodities and services.
The Casecnan multi-purpose hydro facility was already turned over in December 2021 to the government by its former build-operate-transfer (BOT) contractor following the lapse of their 20-year contract. The facility has been placed under the co-ownership of state-run Power Sector Assets and Liabilities Management Corporation (PSALM) and the National Irrigation Administration (NIA).
PSALM previously announced that it will be pursuing immediate privatization of the Casecnan plant so it can assure its continued operation and supply of electricity to the Luzon grid.
PSALM stated then that it will “pursue a sound privatization structure that will ensure the best return for the government, but never compromising the main goal of ensuring continuous power generation and irrigation of the farmlands.”
In December last year, the state-run firm tapped multinational consulting firm PricewaterhouseCoopers (PwC) to undertake third party valuation on the hydropower facility to guide the government on the proceeds it shall rightfully fetch from the asset’s divestment.
Apart from the power plant component of the facility, the Casecnan asset also has integrated irrigation infrastructure that has been providing the irrigation needs of 35,000 hectares of agricultural lands in several provinces of Central Luzon, including its host community in Nueva Ecija.
On the power component of the facility, PSALM had also previously engaged South Korean firm Soosan ENS Co. Ltd., to serve as third party operation and maintenance (O&M) contractor for at least a year to ensure seamlessly electricity supply to Luzon grid.
Following that one-year O&M-manned operation for the facility, the state is eyeing to divest the Casecnan plant so it can raise additional cash that it can use to pay off the remaining power sector liabilities.
