The government is set to privatize the 796.64-megawatt Caliraya-Botocan-Kalayaan (CBK) hydroelectric power plant complex in Lumban, Majayjay and Kalayaan Laguna in April 2025.
The CBK is the oldest hydropower plant complex in the country.
Department of Energy Secretary Raphael Lotilla, who also sits as the vice-chairman of the Power Sector Assets and Liabilities Management Corp., said the CBK privatization was postponed due to the delayed price determination methodology for the third round of the Green Energy Auction.
“The price determination methodology was supposed to have already been acted upon by ERC [Energy Regulatory Commission] in October but chairman Dimalanta was suspended by the Ombudsman and that cascaded in all the delays and therefore that’s why we had to, we could not proceed with it,” Lotilla said.
“Because the concern that had to be addressed was how to maximize the value of CBK. So it’s not PSALM’s fault. PSALM would have been able to privatize that even without GEA-3, but the concern of the Department of Finance was to enhance the privatization value of CBK, and that’s why it got delayed,” Lotilla said.
PSALM, which manages the assets and liabilities of National Power Corp. (NPC), originally planned to privatize the CBK plants last year, but had to wait for the PDM for GEA-3 which was only released in December.
The Caliraya hydro plant, the first power plant built by National Power Corp., was commissioned in 1942. It shares the Caliraya reservoir with Kalayaan.
The plant’s rehabilitation was completed in 2002, while the Botocan plant was built in 1930 and rehabilitated in June 2003.
The Kalayaan Pumped Storage Power Plant was built later, in 1982. Kalayaan I’s capacity was upgraded from 150 MW to over 168 MW, while Kalayaan II was built with a guaranteed capacity of 174.3 MW.
The Kalayaan complex serves as large peaking facility for the Luzon Grid, but its primary function is to provide frequency regulation and control.
Under GEA-3, the DOE is auctioning installation capacities for impounding hydro, geothermal and pumped storage hydro (PSH) totaling 4,650 megawatts covering the delivery period of 2025 to 2035. The auction is scheduled on Feb. 11, 2025.
Energy Undersecretary Rowena Guevara said the GEA-3 will determine the price per kWh of the hydro.
“GEA-3 will tell you how much the price per kWh of these new entrants will be. CBK is also a pumped-storage hydro. It’s not expensive, but it’s old. So its pricing will be affected. That’s why the auction will be in April instead of November,” Guevara said.
PSALM president Dennis dela Serna said six interested bidders were undergoing due diligence for the CBK plants. These include the consortium of Aboitiz Renewables Inc., Electric Power Development Co. and Sumitomo Corp. (Thunder consortium), First Gen Prime Energy Corp., Giga Ace 11 Inc., Korea Water Resources Corp., Marubeni Corp., Citicore Renewable Energy Corp. and Semirara Mining and Power Corp.
PSALM tapped the Asian Development Bank as the transaction advisor to monetize CBK hydro power plants. The Department of Finance was hoping to raise P50 billion to P100 billion from the CBK privatization.