Decision on Leyte geothermal contracts planned for October

Decision on Leyte geothermal contracts planned for October Upper Mahiao geothermal plant, Philippines.
Alexander Richter 7 Sep 2015

Following the failed tender for remaining contracts for capacity of the Unified Leyte Geothermal Plants, PSALM will hold discussions with the sole bidder Unified Leyte Geothermal Energy Inc.. A decision is expected to be made by October 2015.

The Philippines Power Sector Assets Liabilities Management Corp. (PSALM) has announced it will decide soon on how to move forward with the failed sale of the Unified Leyte Geothermal Power Plant’s (ULGPP) remaining contracted capacity after the failure of an auction earlier this month. This is reported by BusinessWorld Online.

A meeting is planned for late this month or early October 2015, so PSALM President Lourdes S. Alzona

The auction for the ULGPP’s remaining capacity failed after only one bidder submitted an offer for the independent power producer administrator (IPPA) contract. Ms. Alzona said PSALM may pursue direct negotiations with Unified Leyte Geothermal Energy, Inc. (ULGEI), the sole bidder; or conduct another round of bids for the contract.

ULGEI, a subsidiary of Lopez-led Energy Development Corp., expressed interest to negotiate with PSALM for the contract. Three other firms in April expressed interest in the IPPA contract in April. The other companies that did not go through with the auction are SPC Power Corp.; Aboitiz-led Therma Central Visayas, Inc.; Phinma Group’s Trans-Asia Oil and Energy Development Corp.

The ULGPP complex — which straddles Ormoc City and municipality of Kananga — is composed of the 125-MW Upper Mahiao plant; 232.5-MW Malitbog plant; 180-MW Mahanagdong plant; and 51-MW optimization plants.

PSALM first auctioned off ULGPP’s contracted capacity in “strips” and “bulk” in November 2013, when the state-run firm offered a total of 200 MW for strips of energy and the remaining capacity for the bulk energy. ULGEI won the bulk energy deal but eventually decided to withdraw its bid, citing damage caused by super-typhoon Yolanda (international name: Haiyan).

The strips of energy, on the other hand, were turned over to the winning bidders in December last year. ULGEI, FDC Utilities, Inc.; Trans-Asia and Aboitiz Energy Solutions, Inc. bagged the rights for 40 MW each. The other winning bidders are Good Friends Hydro Resources Corp. (for 20 MW); Vivant Energy Corp. (17 MW); and Waterfront Mactan Casino Hotel, Inc. (3 MW).

As IPPAs, these companies will have to manage the contracted output of the power plant, which could be traded on the Wholesale Electricity Spot Market.

Source: BusinessWorld Online