First Generation Holdings Corporation (FGEN)

[caleb]

Energy Secretary Angelo Reyes said his department intends to accelerate the sale of the power assets, including the government's 40-percent stake in the Philippine National Oil Company-Energy Development Corporation.

In his report to the President, Jose Ibazeta, chief executive officer of the Power Sector Assets and Liabilities Management Corp. (PSALM), said that aside from the PNOC-EDC, the following power plants are up for sale until December: the 339-megawatt Palinpinon-Panay geothermal plant, which is scheduled for bidding in November; and/or the 746.73-megawatt Tiwi-Makban geothermal plant; and the 175-megawatt Ambuklao-Binga hydroelectric power plant.

"It would be either Tiwi-Makban or Palinpinon. If we can thresh out some issues with Unocal on Tiwi-Makban, we can proceed with the sale of the said asset this year if not we will be selling Palinpinon," Ibazeta said.

PSALM has set until August 24 the submission of letters of interest from potential bidders for the power assets for sale this year.

http://business.inquirer.net/money/tops ... e_id=83629

Then for the next 4 months, Fgen and Aboitiz Power will be very busy in bidding for napocor's power plants.

[caleb]

PSALM sets terms for Ambuklao-Binga auction


The Power Sector Assets and Liabilities Management Corp. (PSALM) has set the deadline on November 28 for bids to acquire the 75-MW Ambuklao and the 100-MW Binga hydroelectric power plants, which are both located in Benguet province.

PSALM, the government agency tasked to oversee the sale of the country's energy assets, said interested groups may submit a letter of interest by September 14.

As a pre-requisite to the receipt of the bidding package, interested groups should execute a confidentiality agreement and pay a non-refundable participation fee of $1,000. The confidentially agreement should be received by PSALM by September 18.

The bidding package shall be issued by PSAL from September 5. A pre-bid conference will be hend on September 26.

Japan's Marubeni had expressed interest to acquire the two hydro-electric power plants.

In the Philippines Marubeni currently owns and operates the 345-megawatt San Roque hydroelectric plant in Pangasinan and the 100-megawatt Mount Apo geothermal plant in Davao.

Aboitiz Power Corp. said last week it was also keen to acquire the Ambuklao and Binga plants.

First Gen. in its investors briefing had indicated that they are interested in bidding for the Ambuklao and Binga plants.

[caleb]

Business
PSALM to package sale of Visayas power plants
By Donnabelle L. Gatdula
Saturday, August 25, 2007
The Power Sector Assets and Liabilities Management Corp. (PSALM), the state agency in charge of the privatization of National Power Corp. (Napocor) assets, will sell the Visayas-based Palinpinon geothermal power plant and Panay diesel plant as a single package.

“After the successful sale of the Masinloc power plant last July, PSALM is set to auction off the Calaca coal-fired power plant in October, the Ambuklao-Binga hydropower facilities in November and the TransCo concession in December. Plans are also afoot to bid out the Palinpinon geothermal plant and the Panay diesel facility as one package, and the Tiwi-Makban geothermal complex before the year ends,” PSALM president Jose Ibazeta said.

But the PSALM official did not specify whether the two power plants of Palinpinon and the two units of Panay will all be included in the package.

The Panay diesel plants 1 and 3 are located in Dingle, Iloilo. Panay 1 has a current capacity of 36.5 megawatts (MW) while Panay 3, with a 110-MW capacity, is still under commissioning.

Palinpinon I, meanwhile, is located in Valencia, Negros Oriental while Palinpinon II, which consists of three modular power plants – Nasuji, Okoy 5 and Sogongon – is located approximately five kilometers away from Palinpinon I. Palinpinon 1 and 2 have a combined capacity of 172.5 MW.

The geothermal steam of the Palinpinon power plants is being supplied by state-owned PNOC-Energy Development Corp. (PNOC-EDC).

Ibazeta said he expects the sale of Napocor’s generating assets to be successful.

PSALM is on the right track as far as fasttracking the privatization of Napocor’s generating assets is concerned, said Froilan A. Tampinco, PSALM vice president for asset management and electricity trading.

“From 11 percent in 2006 to 50 percent in 2007, we expect to hit the 70 percent requirement for open access by end-2008 and complete the sale of the remaining plants in Luzon and Visayas by 2009,” Tampinco said.

[caleb]

yesterday's newspapers reported an ERC approved napocor rate hike for P0.74 in luzon:
http://www.philstar.com/index.php?Busin ... 2007082660
http://www.manilastandardtoday.com/?pag ... aug27_2007
http://www.mb.com.ph/BSNS20070827101384.html

Except The daily Tribune

Napocor to slash power rates by as much as 75c
By Riza Recio

08/27/2007

State firm National Power Corp. (Napocor) said it will be reducing by as much as 74.25 centavos per kilowatthour (kWh) on electricity rates to be reflected in the billing month of Aug. 25 to Sept. 25.

Napocor said the rate cut would be in full compliance with the Energy Regulatory Commission’s (ERC) provisional authority granting Napocor a reduction in the generation charge for the Luzon grid by an average of 74.25 centavos per kwh from March to this month to reflect the foreign exchange gains derived in 2006.

Napocor said the reduction would be on top of a 66.76 centavos per kWh cut to apply between this September to December.

For the Visayas grid, the reduction to reflect currency gains would be 16.79 centavos per kWh covering the period between last March and May.

Napocor said for Mindanao, the pass-on reduction of charges to customers is 3.04 centavos per kWh to be applied from March to October.

The foreign exchange gains being earned by the state-owned power firm was the result of a strong peso. These gains are being passed on promptly to its customers according to the rules and procedures established by the ERC, it added.

Napocor, which holds significant foreign loans and imports billions in foreign fuel, has been benefiting from the continuing strength of the peso from a rate of 56 per dollar in 2005 to the current P46 per dollar.

It reported forex gains of P78.74 billion for 2005 and P68.74 billion for 2006.

and finally, Napocor confirms The Daily Tribune is the one giving the right report:

NAPOCOR: No power rate hike

The National Power Corporation (NAPOCOR) on Monday assured its customers and the electricity consuming public that there will be no increases in its power rates.

The assurance came after two newspapers reported Sunday that the Energy Regulatory Commission (ERC) has allegedly approved a P0.7425 increase for the state-owned power generation company's Incremental Currency Exchange Rate Adjustment (ICERA) Mechanism.

"This is very inaccurate. The approval was for a reduction that resulted in lower effective selling rates for National Power. Our rates have in fact already gone down by almost P0.60/kWh since January 2007. And this already include the subject ICERA of P0.7425/kWh in Luzon," said NAPOCOR president Cyril del Callar.

In the Visayas, NAPOCOR rates have gone down by as much as P0.50/kWh, inclusive of all approved adjustments, while in Mindanao, the rates has gone down by more than P0.28/kWh.

Del Callar said that the ERC has already granted NAPOCOR provisional authority in February to implement the adjustment in March. The ERC even released a public statement through media.

In that statement, the ERC emphasized and highlighted the reduction in NAPOCOR's effective selling rate: P0.0130 per kilowatthour (kWh) in Luzon, P0.3151/kWh in the Visayas, and P0.0045/kWh in Mindanao; rather than on the ICERA itself.

"We have been complying with this order, and we even made public pronouncements about it. The June 12, 2007 decision just confirms the numbers given by the Commission in the provisional authority. There are no additional adjustments," del Callar said.

Del Callar revealed that the reductions in effective rates were due to the implementation of National Power's various programs that aims to improve efficiencies. "We have also already applied the seasonal rate for July to December, which is at least P0.42/kWh less than the January to June rate, as approved by the ERC," he said.

"We expect future applications for our DAAs, including the Generation Rate Adjustment Mechanism (GRAM), to reflect decreases that can be translated to even lower rates for our customers. The recent ICERA, in Luzon particularly, will decrease to P0.6676, or by P0.0749 by September, while those in the Visayas and Mindanao will remain the same," the NAPOCOR chief added

[caleb]

Both units of Masinloc power plant shut


Both units of the 600 megawatt Masinloc coal-fired power plant in the Philippines have been closed down for maintenance, an official at the Philippine state agency for privatising energy sector assets said on Tuesday.

One 300 MW unit will reopen on Sept. 21, said Froilan Tampinco, vice-president of the Power Sector Assets and Liabilities Management (PSALM).

No date has yet been set for the reopening of the other unit, he told Reuters. Both units were closed down in early August, Tampinco added, one for regular maintenance and the other for repair of a electrostatic precipitator, which helps keep down emission levels.

Spokesmen for PSALM and the National Power Corporation have earlier denied that that the closure is linked to a shortage of coal supplies. - Reuters

http://www.abs-cbnnews.com/storypage.aspx?StoryId=90207

[caleb]

again!

Strong peso decreases Napocor rates—ERC
By Alena Mae S. Flores

The Energy Regulatory Commission is set to issue a provisional authority this week, reducing power rates by up to P1.2737 per kilowatt-hour to reflect foreign exchange gains of state-owned National Power Corp.

Commission chairman Rodolfo Albano Jr. said the lower power rates would arise from Napocor’s incremental currency exchange rate adjustment starting October.

The regulatory body earlier granted an increase of P0.7425 per kWh in Napocor’s Icera for Luzon customers to recover foreign exchange movements that impacted on Napocor’s operations from November 2005 to January 2006.

The decision on the Icera this week, meanwhile, will cover the recovery period from February 2006 to June 2006. Napocor registered foreign exchange gains of P78 billion in 2005 and P65 billion in 2006.

Albano said the agency was exploring at least 10 options to reflect the Icera rate reduction on Napocor’s billings.

It may implement a one-time reduction or P1.2737 per kWh from P4.58 per kWh to P3.3063 per kWh.

The options will depend on which one will have a better impact on the consumers, Albano said.

If the reduction is spread over several months, it could be at around P0.15 per kWh, a source said.

The commission may also choose to reduce Napocor’s charge to P4.3344 per kWh (the second option for specified months of recovery); P4.2158; P4.0673; P3.9619; P3.8318; P3.7146; P3.6582; P3.5603; and P3.3063.

“The ERC assures the public that measures had been undertaken to mitigate the impact of such adjustment on the consuming public in the performance of its solemn duty to protect the consumers’ welfare and interest,” Albano said.

Meanwhile, the generation charges of power distributor Manila Electric Co. are also expected to go down for the September billing month due to lower prices in the Wholesale Electricity Spot Market and the higher dispatch of its independent power producers.

http://www.manilastandardtoday.com/?pag ... aug29_2007
am getting mix-up again!

[caleb]

New owner says Masinloc to be fully operational by Oct
08/29/2007 | 04:05 PM

Masinloc Power Partners Co. Ltd., the winning bidders for the 600 megawatt Masinloc coal-fired power plant, is optimistic that it will be able to fully operate the facility by October this year.

“We’ll be working in the next two months to close the transaction and operate the plant as if it was built yesterday," Matthew Bartley, authorized representative of the MPPCL consortium, said Wednesday. Bartley spoke to reporters during the hand over rites of the Masinloc documents Power Sector Assets and Liabilities Management Corporation office in Makati.

MPPCL is expected to complete their respective deliverables within 60 days from the effective date for the closing of the transaction and part of these MPPCL’s deliverables is the performance bond. The performance bond is 2 percent of the bid price less land rentals.

Masinloc was bid out with a transition supply contract covering 265 MW.

Government officials, in turn, were positive that the facility has been turned over to a capable firm.

“The Masinloc power facility would be operated efficiently knowing that the plant is in good hands," PSALM president Jose Ibazeta said.

Bartley, who is also the managing director for Business Development of AES Transpower Pte Ltd, was joined by the consortium’s other representatives: Mr. Naveed Ismail, head of AES Pakistan, Mr. Yogesh Tiwari, Mr. Yari Miralao, Mr. Rohit Gokhale and Mr. Jasper Camacho.

MPPCL is a limited partnership established in the Philippines to invest in, acquire, finance, complete, construct, develop, improve, operate, maintain and hold power production and electric generating facilities in the country. Its parent company is AES Corp., a Singaporean firm listed in the New York Stock Exchange. - GMANews.TV

[caleb]

from rufino bomasang of mg mining and energy corp:

In a presentation during the recent Asean Energy Business Forum in Singapore, he said the cost of coal-based power generation was estimated at only 4.5 centavos per kilowatt-hour (kWh), as compared with 4.5-6.9 centavos per kWh for natural gas combined cycle, 2-8 centavos per kWh for large hydropower facilities, 3-10 centavos per kWh for wind and 40-60 centavos per kWh for solar.

"Coal prices are likely to remain lower and more stable in the future," he said, adding that prices had declined in real terms over the past years due to market competition.

[caleb]

The Philippine government said on Friday that it was selling a 192.5 megawatt (MW) geothermal power plant and a 146.5 MW diesel-fired plant and that bids would close on Dec. 5.

The plants are the Palinpinon geothermal plant in Negros Oriental province and the Panay diesel plant in Iloilo province, the Power Sector Assets and Liabilities Management Corp (PSALM) said in a newspaper advertisement.

PSALM is the state agency that is overseeing the privatisation of the power sector.

It said due diligence could be conducted from Sept. 17 until Dec. 3.

[caleb]

KEPCO mulls Ilijan plant expansion



By MYRNA M. VELASCO

Korea Electric Power Corporation (Kepco) will re-study its business case on previously-laid plans to expand its 1,200-megawatt Ilijan natural gas-fired power facility by another 600 MW.


Recent market developments indicate potential rise in capital investment for natural gas-fired facilities as compared to plants utilizing other fuels to generate electricity.

"Natural gas appears to be an expensive option. So that should give us the signal to re-study plans for Ilijan expansion," a highly-placed source has noted.

Kepco announced two years ago its intent to pour in additional investment of $ 450 million to expand Ilijan’s capacity.

Project timetable, however, has been hurdled by various factors. These include the timeframe on when the consortium of Shell Philippines Exploration B.V. would be selling additional gas from the Malampaya field and when the supply contract for the shelved San Pascual cogeneration project shall be bid out by the Power Sector Assets and Liabilities Management Corporation.

TeaM Energy, which acquired the stake of US firm Mirant Corporation in the Ilijan project, already advanced word that it is keen to participate in the expansion venture for the facility.

The plant’s capacity increase, it was noted, would be providing a good chance for the utilization of the banked gas; which will likely satiate a seven-year fuel requirement of the expanded facility.

On the sphere of financing, Kepco officials said they will have to re-assess the viability of either project finance or equity infusion, depending on the outlook of the capital markets when the project hits implementation phase.

Off-take arrangements (or tapping buyers of the generated electricity) thrive among the tedious concerns to resolve.

Apart from plans to bid for the 300-MW power purchase agreement (PPA) previously assigned to the San Pascual project, direct selling to bulk users of electricity is also explored as an option.

Should this project firmed up, this will be an addition to the supply in Luzon; and will likely address bid for capacity addition eyed in 2011.

The government has already started knocking on the doors of power investors for them to pour in fresh capital for additional capacity needed to meet the country’s future electricity demand. (MMV

this article is a revelation. Kepco is now reconsidering the use of natural gas in its planned expansion program. natural gas is more expensive than coal as feedstock for power plant.

aside from the feedstock. Timing in financing the project is now critical depending on the outlook of the capital market now being hit by the subprime issues.

with no supply contract from the shelved 300 MW san pascual cogeneration project, demand issue or offtake arrangement will be a critical issue too.

going into coal power plant will take at least 4-5 years to plan and construct. Kepco Ilijan will not be able to help when the power crisis will hit us by year 2009

[caleb]

First Gen, Fil-Estate eye PNOC-EDC block



MYRNA M. VELASCO

Local firms First Gen Corporation and Fil-Estate Corporation are reportedly frontrunners among the first batch of investors that indicated interests to buy into the 60 percent block shares of the Philippine National Oil Company (PNOC) in its geothermal subsidiary PNOC-EDC due for divestment this year.


A highly-placed source disclosed that eight companies already expressed interests ahead of the September 20 schedule for the solicitation of tenders set by privatization committee (PRIVACOM), but the two firms are classified as "most serious" in pursuing their bids.

The PRIVACOM of PNOC is giving interested parties from September 20-24 to submit their respective letters of interest (LOIs) if they intend to join the bidding for the block shares on November 21 this year.

Upon submission of the LOI, the PRIVACOM shall furnish the prospective bidders the initial prequalification guidelines as well as the Confidentiality Agreement and Undertaking.

The pre-bid conference, which serves as the venue for prospective bidders to raise inquiries on the auction process, is set at 2:00pm on September 24.

The divestment of the 60-percent block shares of PNOC in the geothermal company is being pursued at almost the same period when the Power Sector Assets and Liabilities Management Corporation (PSALM) is also aggressively selling the generation assets of the National Power Corporation.

In fact, it was learned that most of the prospective bidders in the NPC assets being sold by PSALM are now turning their attention to the PNOC-EDC privatization.

The block shares to be privatized comprise of 6.0 billion common shares and 7.5 billion preferred shares that include the 13-percent shares accounting for PNOC-EDC employees’ retirement fund.

[caleb]

The government is selling its remaining stake in PNOC-EDC to help plug this year’s budget shortfall.

The state aims to sell the stake through a public bidding scheduled on Nov. 21.

The government had earlier sold a 20% stake in PNOC-EDC through an initial public offering and another 20% stake through a secondary shares offer.

The government earlier said it expected to raise P32 billion to P36 billion from the sale of its 47% stake in the geothermal firm.

With the 13% stake of the retirement fund now placed in the auction block, the government should earn more from the shares disposal

.

the total 60% will cost the bidder from P40 billion to P45 billion. total market capitalization of Fgen as of 9/19 is P51 billion. total market capitalization of PNOC-EDC is P88.5 billion.

[jackofalltrades]

That is a good point, Caleb. Actually, when AC set up its corporate vehicle to enter the power industry, it was going to pursue EDC. It so happened that EDC went to the IPO route, successfully I should say. The challenge now for interested companies for the remaining government stake in EDC would be to justify to rich valuation of the geothermal company. An acquirer should be able to assess whether EDC would give itself a solid platform for growth in the geothermal energy field.