DOE junks BNPP plan

The Department of Energy (DOE) has abandoned as unfeasible plans to convert the mothballed $2.1-billion Bataan nuclear power plant into a natural gas-fired power facility, a government energy expert said over the weekend.

DOE petroleum resources development division chief Ismael Ocampo said it would be too expensive to convert the nuclear plant into a natural gas facility.

"It would be cheaper to retire the nuclear power plant and build a new plant within the property than convert it. A lot of the existing structures will not be used," Ocampo said, adding that only about five percent of the plant’s assets would be used if it were converted into a gas-fired facility.

The decision to abandon the conversion again raised questions on what to do with the 18-year-old nuclear plant for which, industry sources said, the government is still paying $350,000 a day in interest payments alone.

Even the Power Sector Assets and Liabilities Management Corp. (PSALM) cannot answer questions on what to do with the facility, which remains a non-performing asset of the national government.

"It is not among the power plants to be sold. It is a national government asset (and not owned by the National Power Corp.)," said Froilan Tampinco, vice president of PSALM which was created to dispose of Napocor’s assets.

The nuclear plant, designed to produce

620 megawatts of power, was completed in 1985 and was about to be put on line when the regime of dictator Ferdinand Marcos was ousted by the first people power uprising.

The administration of former President Corazon Aquino mothballed the nuclear plant as questions on its design were raised after the 1986 nuclear accident at Chernobyl in Ukraine, formerly part of the Soviet Union.

Controversies also arose on the financing of the plant’s construction, raising an international legal dispute between the government and the plant’s US contractor Westinghouse.

On March 4, 1992, the Aquino administration and Westinghouse entered into a compromise agreement where Westinghouse would upgrade and refurbish the plant over a three-year period at a cost of $400 million and operate the plant for up to 30 years.

Under the agreement, Westinghouse was to be paid a management fee of $40 million a year and .029 US cents for every kilowatt-hour generated by the plant.

Westinghouse also agreed to pay the Philippines $10 million in cash and $75 million in discounts on the upgrade and credits on non-nuclear-related equipment for the country’s power development program. However, the compromise agreement was shelved.

In May 1995, then President Fidel Ramos issued Executive Order No. 243 creating the Nuclear Power Steering Committee which was to revive the country’s nuclear power program.

Two years later, in November 1997, the government approved plans to convert the nuclear facility into a combined gas cycle plant. The unspent uranium was also soled to the US-based Siemens Power Corp. in December 1997.

Last year, the DOE and the Philippine National Oil Co. (PNOC) studied converting the nuclear plant into a gas facility in a bid to speed up and intensify the development of the downstream natural gas industry but the study showed the plan was unfeasible.