PSALM sets auction for Panay-Bohol plant

The Power Sector Assets and Liabilities Management Corp. (PSALM) has set the auction date for the 146.5-megawatt (MW) Panay and 22-MW Bohol diesel power facilities on Oct. 29, 2008.

The asset manager issued yesterday the invitation to bid (ITB) for the generation plant package, informing  interested parties to submit their respective letter of interest on or before July 30.

Interested investor groups are also required to pay a non-refundable fee of $2,000 and execute a confidentiality agreement and an undertaking with the government power privatization firm.

Qualified investor groups can then conduct their due diligence from July 17 to Oct. 27, 2008.

A pre-bid conference for the prospective bidders of the Visayas-based power assets is on Aug. 6 at the PSALM office in Makati City.

In its original asset sale schedule, PSALM packaged the Panay diesel plant with the 192.5-MW Palinpinon geothermal plant.

But since the long-term steam supply agreement to be attached to the Palinpinon plant still has to be approved by the Joint Congressional Power Commission (JCPC), the PSALM board decided to move the sale of the geothermal asset to 2009.

Under JCPC Resolution 2006–1, the agreement, now known as the geothermal resources supply contract, is subject to the commission’s approval.

The PSALM board formally announced the withdrawal of the bidding for the Palinpinon-Panay package in a supplemental bid bulletin (SSB) it issued last July 3, to the prospective bidders. This clarifies reports that the privatization of the Palinpinon plant was moved to November.

The Panay diesel power plant facility consists of the 36.5-MW Panay 1 diesel power plant and the 110-MW Panay 3 Diesel Power Plant. 

Panay 1 was commissioned in 1979, while Panay 3, which is also known as the Pinamucan diesel power plant, was relocated from its Batangas site after the expiration of the BOT (build-operate-transfer) contract with Enron Power Development Corp. in 2003.

The plant was transferred to its present location to prevent a potential near-term power shortage and to provide voltage stabilization in the island of Panay.

The Panay 1 and 3 diesel plants are the only land-based facilities of the National Power Corp. (Napocor) in the island. They are peaking plants that provide ancillary services such as backup power, load following, system frequency and voltage regulation.

The Bohol diesel power plant, Napocor’s first diesel plant in the island, was originally constructed together with the 1.2-MW Loboc hydro plant to provide electricity to nearby towns.

Consisting of four 5.5-MW identical generating units, the Bohol facility continues to operate as a peaking and voltage-regulating plant.