Comfort food - EMOTIONAL WEATHER REPORT By Jessica Zafra

The Department of Energy (DOE) has commissioned three more consultants to assist the Power Sector Assets and Liabilities Management Corp. (PSALM) in the privatization of the energy contracts of the National Power Corp. (Napocor)  with independent power producers (IPPs) through the selection of IPP administrators (IPPAs).

The new consultants are Robert Dykstra, Peter Bedson, John Breslin and David Baker of the Lacima Group; Michael Wagner of IPA Energy + Water Consulting; and Richard John Hemmings of Stonelegh Consulting.

With offices in the US, United Kingdom and Australia, the Lacima Group delivers expertise in applying financial engineering techniques to the energy, commodities, and financial markets. It provides analytics and risk management consulting and advisory services, pre-designed software, and bespoke software solutions to clients spread in over 20 countries.

IPA Energy + Water Consulting, on the other hand, is an independent energy consultancy that has worked in the electricity and gas deregulation and market development for 17 years. Based in Edinburgh, United Kingdom, the company has global experience in creating, implementing and strengthening energy markets to increase competition, raise economic efficiency, attract private sector capital, foster renewable energy, and promote emissions reduction.

Stonelegh Consulting, meanwhile, offers consulting services to the gas and power industries, particularly in the areas of electricity and gas contracts, and environmental and emissions trading.

Based on the contract, the consultants will review the IPPA structure, develop alternative approaches to the privatization of PSALM/Napocor- IPP contracts, and make the final recommendations on the matter.

In a meeting with the DOE, PSALM discussed the deliverables and timelines of the tasks while the new advisers laid down their proposed work program.

The various tasks of the consultants are expected to be completed on Aug. 31.

The consultancy project will be financed by the World Bank and will complement the work completed by British Power International which was funded by the Asian Development Bank.

PSALM targets to conduct the public bidding for the selection of PSALM’s IPP administrators in early September and the IPPAs appointed by the end of 2007.

PSALM is also set to conduct an investors’ forum later this year to generate more interest in the IPPs.

Appointed by PSALM through open and competitive public bidding, IPPAs are qualified independent entities which will administer, conserve and manage the contracted energy output of Napocor-IPP contracts, including selling the energy production and/or offering ancillary services.

PSALM has been earnestly working on the transfer of the IPP contracts to private ownership. The transfer of the management and control of at least 70 percent of the total energy output of the Napocor-IPP contracts to IPPAs is one of the preconditions for open access and retail competition that will eventually translate to more affordable electricity prices for Filipino consumers. 

The selection of the new consultants, PSALM said, went through a very rigid process as the PSALM selection committee took into consideration the intensive trading and risk management expertise of these consultants.