PSALM seeks higher power supply contract for Masinloc plant sale

The Power Sector Assets and Liabilities Management Corp. (PSALM) may convince the National Power Corp. (Napocor) to increase the capacity of the transition supply contract (TSC) to be attached to the sale of the 600-megawatt (MW) Masinloc coal-fired power plant.

PSALM vice president for asset management and electricity trading Froilan Tampinco said Napocor’s proposal still needs to be studied by the asset management firm. PSALM is the state agency tasked to oversee the privatization of power assets.

"We have received a formal letter from Napocor on the Masinloc TSC. But we have yet to review the proposal. We need to have a mutual agreement on this issue," he said.

Tampinco said Napocor’s proposal to assign only 137.5 MW to Masinloc was "quite low."

"The 25 percent of the 550-MW dependable capacity TSC being proposed by Napocor may be raised. That is just a proposal. Its not final yet," he said.

The PSALM official added they would try to thresh out the TSC issues within this week. "Our target is to resolve these issues with Napocor on or before May 8, the scheduled pre-bidding conference for Masinloc."

According to Tampinco, PSALM’s primary objective is to create value for Napocor’s assets. "Our perspective may be different from that of Napocor but we think they should support our goal. The TSC will add value to Masinloc."

Late last week, Napocor president Cyril del Callar said they have proposed to assign 25 percent of the 550-MW daily average load or dependable capacity to Masinloc or the equivalent of about 137 MW.

Del Callar said this level of TSC is similar to the previous TSCs that PSALM had attached to other Napocor generating assets that were earlier sold.

But the Napocor chief admitted that it would be up to PSALM to decide on the final TSC.

Masinloc, located in Zambales, is one of Napocor’s most efficient power facilities. It is slated to be put in the auction block on July 26 this year.

As of press time, the number of investors that have expressed interest to join the Masinloc power plant bidding has ballooned to 23.

The TSC level is one of the critical factors cited by bidders as this will ensure the new owner of the Napocor power facility a ready market for the plant’s power output.