State-run Power Sector Assets and Liabilities Management Corp. issued a notice of award to First Gen Corp.’s Fresh River Lakes Corp. as the winning bidder for the 165-megawatt Casecnan hydroelectric power plant.
PSALM president Dennis dela Serna said the Fresh River had passed the post-qualification process, which was conducted to verify the accuracy and authenticity of the eligibility documents submitted.
“We sent the NOA Wednesday or Thursday,” Dela Serna said, adding that they expected Fresh River to submit its payment by the end of the year.
Fresh River offered the highest bid amounting to $526 million for CHEPP.
“The successful privatization of this crucial power plant represents a significant milestone in our efforts to strengthen energy security. With the private sector injecting the necessary efficiency and capital for energy expansion, we can ensure a reliable and resilient energy sector for our nation’s future,” Energy Secretary Raphael Perpetuo Lotilla said earlier.
The winning bid surpassed the minimum offer price for CHEPP, which was determined by the PSALM board to be $227,272,727.28
CHEPP is a run-of-river type of power project with limited impounding facility in Barangay Villarica, Pantabangan, Nueva Ecija.
“The privatization of the Casecnan Hydroelectric Power Plant will ensure that the sector remains competitive so as to reduce prices and increase efficiency,” Finance Secretary Benjamin Diokno said.
Diokno sits as the chairman of the PSALM board.
“The proceeds from the sale of CHEPP will be used to liquidate the outstanding financial obligations that PSALM had assumed from the National Power Corp. to settle government debt,” Diokno said.
The management of CHEPP was transferred to the government after the conclusion of the build-operate-transfer agreement between California Energy Casecnan Water and Energy Co. Inc. and the National Irrigation Administration on Dec. 11, 2021.
PSALM and NIA share ownership of the plant on a 60-percent and 40-percent arrangement, respectively.
First Gen chairman and chief executive Federico Lopez said power assets like the CHEPP “are very hard to replicate.”
“They’re all in tune to where the world is headed with regards to a decarbonized energy system. These are very important assets for us to come and as they come together, the synergies also become stronger and the ability to run it as a complex,” Lopez said.
First Gen president and chief operating officer Francis Giles Puno said CHEPP is located near the company’s Pantabangan- Masiway and Aya hydropower plants.
“We really needed to make sure the reservoir is controlled by First Gen,” Puno said.
“It also enables us to build out solar and wind as well because they are intermittent. If we add it up, we create an RE [renewable energy] portfolio,” Puno said.