The auction for the appointment of independent power producer administrator (IPPA) for the supply contracts of the 110-megawatt Naga thermal facility and 39-MW Cebu diesel facility on August 18 this year has gotten go-signal from the board of directors of the controversy-ridden Power Sector Assets and Liabilities Management Corporation.

“As of now, it’s a go. The PSALM board has given its go-signal for that (Naga contract’s IPPA auction),” Energy secretary Rene D. Almendras has declared to media.

He further hinted that two interested parties will likely join the bidding. The privatization of the Naga-Cebu plants’ contracts through IPPA engagement will fill in the 2.0-percent gap in the 70-percent privatization threshold to legally warrant the introduction of open access in the restructured power industry.

Of the prospective bidders, it was SPC Power Corporation that came forward indicating its interest.

This is the same company of which letter-agreement with PSALM and National Power Corporation (NPC) on its Panay-Bohol plants acquisition is also being questioned for contravention of policy prescriptions under the Electric Power Industry Reform Act.

The PSALM board earlier deferred the decision to privatize the contract of the 640-MW Unified Leyte geothermal facilities because of intensified opposition from affected local government units (LGUs) and electric cooperatives in the Visayas.

For the 650-MW Malaya thermal facility, the government’s decision will be to have its contract lapse by January 2011 and have the facility turned over to government first. Any eventual plan to have it privatized, according to Almendras will be tied in to the proposed retrofitting of banker-C fired plants and shift their fuel use into gas.

“If we will wait for its contract to expire by January, we will already achieve the minimum numbers. So we don’t actually have to sell it,” he stressed.

But in the future, he noted that if the government sees prospect of fetching a good price for the asset, “it in the interest of really bringing down the debts, I’d really like to sell it.”

The energy chief added that Malaya will be among those planned for conversion into gas-fired facility, so the timetable for its sale may come at the time that both supply and pricing on the resource present more economically-feasible numbers, especially for the end-consumers. “What I’m trying to do is: there’s suggestion that we have to sell Sucat and we have to sell Malaya. If you can bring gas to Sucat, then that would be a good thing,” adding that with such development, “the economics of Malaya also improves.”

The eventual sale plan for the Malaya facility, he added, “ties in with the discussion of how we can bring gas, to also improve the price.”

As far as Leyte IPPA is concerned, he noted that the best opening will be the commercial operation of the Wholesale Electricity Spot Market (WESM) in the Visayas because that will somehow provide the pricing mechanism for electricity in the area.