Debates on the privatization of the 246-megawatt Angat hydropower facility turned as hot as the summer months, after the concessionaires providing water supply for Metro Manila collaboratively pushed for the removal of a provision setting ancillary services capacity nomination and fiercely questioned other policies set in the water protocol that shall govern the operation and maintenance (O&M) of the hydropower facility upon its divestment.

During a privatization forum at Shangri-La Hotel hosted by relevant government agencies, both Manila Water Company (MWC) and Maynilad Water Services Inc. (MWSI) took turns manifesting their concern that if the plant’s capacity will be committed or contracted for the power stability and reliability needs of the National Grid Corporation of the Philippines (NGCP), this may unduly compete with the use of water for domestic consumption which is the clear priority in the water protocol. The other priority uses would be for municipal water supply, then irrigation; while electricity generation will be last in the value chain.

Under Section 5.3 of the latest water protocol draft circulated on February 11, it was stipulated that “the buyer/operator may nominate the AHEPP (Angat Hydroelectric Power Plant) for ancillary services, subject to the provisions of the Water Code, the Rule Curve and the provisions of (the) Agreement.”

The water protocol will be integrated in the O&M agreement that must be entered into by seller Power Sector Assets and Liabilities Management Corporation (PSALM) with the buyer of the Angat facility. Of the 246-MW capacity, only 218 megawatts have been committed in the privatization exercise since the auxiliary units 5 and 6 (with aggregate 28 MW capacity) owned by the Metropolitan Waterworks and Sewerage System (MWSS) had been excluded.

MWSI president Rogelio Singson, in particular, raised query on the possibility that the plant’s nomination for ancillary services be taken out from the water protocol, especially since there is no specific stipulation on how that function shall be carried out, like “if that would be regardless of water level.”

MWC president Jose Rene Almendras noted that “while we are not objecting to the plant’s privatization, we are just here saying to protect the interest of drinking water for 15 million people in Metro Manila.” He added that from their end, they want to see the final version of the water protocol first and ascertain if specific issues have been properly addressed, since failing to do so, would also infer that investors are tugged “blindly bidding for something they don’t know it’s there.”

The other major point raised by the MWSS concessionaires would be on limiting the blackstart capacity (power recovery function from a blackout) of the Angat plant to just one hour of generation, when feasible. Proposals have also been put forward to the National Water Resources Board (NWRB) on the possibility of reducing water releases for National Power Corporation’s power generation use, given critical water elevation because of the El Niño phenomenon.