Qualified bidders given upper hand on Malaya plant’s sale option

By Myrna M. Velasco – June 15, 2018, 11:16 PM
from Manila Bulletin

The government is now willing to put into the “qualified bidders’ hand” the fate of the 650-megawatt Malaya thermal plant’s divestment – primarily on the option to have its fuel utilization shifted to natural gas.

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(MANILA BULLETIN)

If he will have his way, Energy Secretary Alfonso G. Cusi noted that he will still prefer a conversion of the facility to a gas-fired power asset, but he said “the bidders will have to be consulted” prior to finalization of the privatization package.

Then this matter will have to be lodged again to the board of the Power Sector Assets and Liabilities Management Corporation (PSALM), so the final terms of asset’s divestment can be decided on. The PSALM board is chaired by Department of Finance Secretary Carlos G. Dominguez III.

DOE Assistant Secretary Redentor E. Delola said “we’ll talk to the DOF again, because for us at the Department of Energy, we can already let go of the asset.”

He noted that the energy department already sent its correspondence to the DOF on this matter, stipulating the DOE’s intent to have the capacity of the Malaya plant be guaranteed as continuing ‘safety net’ to the grid, primarily when Luzon grid supply runs tight.

“We want to be assured on the safety that the power generation of the Malaya plant has been giving to the grid – at least for the next three years,” he said.

Reckoning from that timeframe though, Delola indicated “we will also need to assess if we still need it (Malaya plant) for three years. So we need to look at the figures again, because we are also looking at prospects that such duration for the Malaya plant’s function as MRU (must-run unit) may already be shortened.”

As a must-run unit, the Malaya plant is the “ready generating asset” that the system operator can call for dispatch when reserves would reach decimated or strained levels in the Luzon grid.
On the fuel shift plan, the energy official reiterated that such shall already “be left to the discretion of the bidders.”

The government, through PSALM, had placed the asset on the auction block again last year – but it was a “privatization process interrupted” following the DOE’s proposal then to have its fuel use shifted to gas.

At least four investor-groups had been enticed to bid for the Malaya power asset, but it remains to be seen if that interest would still be there when the State finally firms up the sale plan.