By Amy R. Remo
Philippine Daily Inquirer
First Posted 08/18/2010
THE DEPARTMENT of Energy will no longer privatize or offer to investors the 955-megawatt Agus and Pulangi hydropower plants in Mindanao as these are expected to help stabilize supply and electricity prices on the island.
â€œIâ€™m not eager to sell [the hydro facilities] because I think part of the solution to the Mindanao situation is the appropriate use of those [plants] not just for supply but in the pricing equation,â€ said Energy Secretary Jose Rene Almendras.
The two facilities are critical power assets as these currently provide more than half of Mindanaoâ€™s electricity supply.
At the sidelines of the mid-year economic briefing Wednesday, Almendras said that he has informed the state-run Power Sector Assets and Liabilities Management Corp. (PSALM) that â€œwe would like to recommend that we do not sell Agus and Pulangi.â€
The energy chief acknowledged that the DOE had to seek a confirmation or a go-ahead from the Joint Congressional Power Commission (JCPC) to allow it to keep the facilities.
Under the Electric Power Industry Reform Act (Epira), the government is mandated to privatize all its power generation assets, including the Agus and Pulangi facilities.
â€œSo hopefully, Congress will [allow] us. I will have to explain to Congress why we donâ€™t want to [privatize the facilities],â€ Almendras said.
â€œ[The Agus and Pulangi are] not yet for sale. We donâ€™t want to sell it yet, or maybe how long that will be, it will depend on how soon we can achieve true pricing [in Mindanao] and make appropriate adjustments to encourage investments,â€ Almendras pointed out.
Since it relies heavily on hydropower, Mindanao was the hardest hit by the prolonged drought experienced earlier this year, during which the island suffered power outages lasting up to 12 hours daily.
It was only in July and August this year, with the onset of the rainy season, did the power supply situation in Mindanao began to stabilize.
Last May, former Energy Secretary Jose C. Ibazeta stressed the need to sell all government-owned power-generation assets despite the opposition raised by a number of civil and nongovernment groups.
PSALM was even planning to start preparations for the planned privatization of the hydroelectric facilities by the end of the year. A number of prospective investors had expressed interest in the Agus and Pulangi hydropower plants, including Norway-based Statkraft Norfund Power Invest AS (SN Power).
The Agus hydropower facilities have seven units that can generate a total of 700 MW. Agus 6, the first of the seven units, was constructed in 1953 while the newest of the power plants was Agus 1, which began operating in 1992.
The Pulangi hydropower plant in Bukidnon can generate 255 MW. It began operating commercially in 1985.