With the turnover, revenue stream would now directly flow into the staterun affiliate’s coffers; and one key twist rests on the fact that it would not anymore saddled with dollarindexed capacity payments for the asset.

It would be noted that the terms of build-operate-transfer (BOT) contracts of PNOC-EDC with project sponsors were referenced on US dollars; but the payments it is receiving for the electricity supplied to National Power Corporation (NPC) is set in pesos.

Given that predicament, the company has been registering significant foreign exchange losses that it opted to plug up via refinancing; thus, it incessantly needed to tap loans.

After the Upper Mahiao ownership transfer, PNOC-EDC will wait for next year and up to 2009 for all of its BOT obligations to fall due.

"We’re expecting hopefully that the revenues would increase significantly by the second half of the year as the Upper Mahiao would be turned over," indicated PNOC president Eduardo V. Manalac.

He added that the turnover of the asset "would result to lesser payments, and expectedly higher revenues, as the electricity sales would go straight to our books."

In the first quarter, Manalac divulged that PNOC’EDC’s net operating income was roughly flat at P2.45 billion, mainly attributed to the lower foreign exchange gains posted due to its BOT obligations.

"Revenues are recorded at P5.27 billion or just about P100 million higher than the previous year’s revenues," he added.

It was culled from the company’s books that the influx of its BOT arrangements essentially expanded its asset base from P441.3 million when it was established in the ‘70s to P74.2 billion at present time.

Prior to the asset’s transfer, PNOC-EDC and CalEnergy have rigorously undertaken operational runs since this is the first power plant to be operated directly by the former.

PNOC-EDC’s experience in the power generation sector was just initially in steamfield development and operations, as fuel supplier to most of the country’s geothermal power plants.

From that endeavor though, the company is taking in more extensive experience in running power facilities with various projects it is due to implement.