First power privatization under President Marcosgets PCC nod

Casecnan takeover

MANILA, Philippines — The country’s antitrust agency has cleared the first power privatization project under the Marcos administration as the deal is unlikely to reduce competition in the market.

The Philippine Competition Commission (PCC) has given the green light for First Gen Corp. subsidiary Fresh River Lakes Corp. to take over the 165-megawatt (MW) Casecnan hydroelectric power plant (CHEPP) in Nueva Ecija from state-owned Power Sector Assets and Liabilities Management Corp. (PSALM) and National Irrigation Administration.

PSALM’s Corporate Accomplishment report for 2022 showed CHEPP, along with the 796.46 MW Caliraya-Botocan-Kalayaan (CBK) HEPPs, were those approved for privatization by the PSALM Board in September 2022.

PSALM issued the invitation for the bidding of the CBK HEPPs in December last year.

Fresh River emerged as the winner after submitting the highest bid of $526 million in May 2023.

Last December, the PCC Mergers and Acquisitions Office (MAO) started its Phase 1 review of Fresh River’s proposed acquisition to determine if there are potential antitrust concerns that may arise from the transaction.

Based on the review, the office found that competing energy generation companies exert competitive pressure on the parties.

The MAO also found that the volume generated by the Casecnan plant is unlikely to impact the relevant markets, and the Electric Power Industry Reform Act of 2001 (EPIRA) has safeguards to ensure the market remains competitive.

Located near Pantabangan and Munoz, in Nueva Ecija, the CHEPP is a run-of-river hydroelectric power plant.

First Gen declined to comment when asked about expansion plans for the facility.

Casecnan is in the same general area as the 132-MW Pantabangan-Masiway hydroelectric power plant owned and operated by First Gen.

Under the EPIRA, PSALM is mandated to privatize all assets and liquidate all financial obligations of state-owned National Power Corp.

The PCC, on the other hand, is mandated under the Philippine Competition Act to review mergers and acquisitions to ensure such will not substantially lessen competition and harm consumer interest.