PSALM sets sale of Calaca coal-fired power plant

The Power Sector Assets and Liabilities Management (PSALM) has set an internal target of November to close the sale of 600-megawatt (MW) Calaca coal-fired power plant.

“We have set the date of November to be able to close the sale of Calaca with Suez Energy,” PSALM president Jose Ibazeta told the Joint Congressional Power Commission (JCPC) over the weekend.

Included in the JCPC’s agenda in last Friday’s hearing was the proposed interim open access which is currently undergoing public hearing.

The Energy Regulatory Commission (ERC) is asking PSALM to once and for all set a timeline for the financial close of the Calaca deal as this is part of the conditions before the proposed IOA kicks in.

“We are in constant discussion with winning bidder of Calaca in trying to determine the final timeline,” PSALM vice president for asset management and electricity trading Froilan Tampinco said.

Tampinco recognized that if there is already a directive from ERC, PSALM will have to comply.

“We received a letter from ERC. We are now studying how we can comply. But we have to consult with the winning bidder to have a mutual agreement. We will definitely comply,” Tampinco said.

Tampinco said they are still waiting for the completion of the repair on Unit 1 of Calaca.

“We are really set to settle this deal. But there are some factors preventing us from doing so. We have to wait for the repair of one of the units of the plant before we can turn it over to the new buyer,” he said.

“When they bid out Calaca, the two units have been working. So we need to deliver it on as is where is basis. This is one of our stumbling blocks,” he said.

According to Tampinco, aside from this, another factor that hindering PSALM from closing the Calaca deal is the rates.

“Of course, there is the issue of prices. But this is being address by numerous filings of the National Power Corp. (Napocor) with the ERC,” he said. He said they would definitely come up with solutions to these issues on the Calaca sale within the year.

The Calaca plant was bid out on Oct. 16, 2007, with the consortium of Calaca Holdco Inc. (CHI) emerging as the highest bidder with a bid of $786.53 million.

Under PSALM bidding rules, the winning bidder should come up with a 40 percent upfront payment 270 days after the contract of effectivity is served to the buyer.

CHI is wholly owned by Suez-Tractebel through its wholly-owned subsidiary Belgelectric Finance B.V.