NPC unloads 7 of 14 small utilities
Wednesday, January 18, 2006
Seven out of fourteen National Power Corporation-Small Power Utilities Group (NPC-SPUG) areas that were opened for private sector participation have already been privatized as of December 2005.
The Department of Energy (DoE) reported that the seven privatized SPUG areas are Tablas, Romblon, Marin-duque, Oriental Mindoro, Mainland Palawan, Catanduanes and Bantayan Island.
The New Power Providers (NPP) of these areas are Coastal Consortium for Tablas, Romblon and Marinduque, Power One Corporation for Oriental Mindoro, Mainland Palawan and Catanduanes and Bantayan Island Power Corporation for Bantayan Island.
These NPPs won through a competitive bidding and will supply power requirements using bunker, diesel fuel or hybrid (diesel-wind) energy.
"The privatization of NPC-SPUG areas will contribute to sustaining the turn around in NPC’s finances due to reduction in subsidy to these areas, and will ensure improved efficiency in power supply management that will result to lower rates for consumers in the SPUG areas," Energy Secretary Raphael Lotilla said.
The NPC estimates that once the NPP takes over, the seven privatized areas with a total capacity of 82 MW will result in an annual potential fuel savings of around P2 billion for the NPC.
Meanwhile, the International Finance Corporation (IFC), the designated Transaction Advisor for the privati-zation of these 14 areas, will start the due diligence for the remaining seven SPUG areas starting this month.
The DoE, Occidental Mindoro Electric Cooperative (OMECO) and the IFC signed a Memorandum of Agreement (MoA) last January 9, 2006 in preparation for the privatization of the Occidental Mindoro area.
The IFC is tasked to assist the electric cooperatives (ECs) in designing and overseeing the competitive selection process for determining the NPP that will supply the power requirements of the ECs.
The remaining seven SPUG areas that have yet to be privatized are Masbate, Occidental Mindoro, Camotes Island, Siquijor, Basilan, Sulu and Tawitawi.
The power supply contracts for the Bantayan Island and Oriental Mindoro have already been submitted to the Energy Regulatory Commission (ERC) for their approval while the other five will be forwarded by the new owners to the ERC within the first quarter of 2006.
Last January 26, 2004, the DoE opened 14 existing NPC-SPUG areas across the country for private sector participation to take over and provide electricity in these areas.
Considered the most attractive areas for private sector participation, electricity demand in these 14 areas has been steadily increasing due to increased economic activities. Most of these areas are also potential tourist destinations.
Private sector participation could take the form of a take over of the supply of electricity to any existing NPC-SPUG areas, either through outright purchase or lease of existing NPCSPUG assets.
The private sector could also install new power generating facilities including associated power delivery systems.
New players are also expected to pursue projects that would address the lowest long-term cost of power and services, environmental compatibility with the local area and the most advantageous implementation schedule.
posted by philpower @ 9:48 PM,
