State-run Power Sector Assets and Liabilities Management Corp. plans to tap a third-party consultant for the financial valuation of the 797.92-megawatt Caliraya-Botocan-Kalayaan hydropower plants in Laguna province.
PSALM said in a mid-year accomplishment report the third-party consultant should consider all operating costs of the CBK HEPPs, including unpaid transmission charges.
“These operating costs shall also be reflected in the transaction documents for the privatization of CBK HEPPs,” the agency said.
The PSALM board earlier approved the privatization of CBK-HEPPs through Board Resolution No. 2022-0323-04 dated March 23.
PSALM said it was preparing an action plan to address the issues and concerns raised in the study of the Asian Development Bank for the privatization of CBK HEPPs.
These issues include the determination of the competitive position of the CBK HEPPs in the ancillary market and change in the definition of the CBK HEPPs from a “load” center to a “generator” in accordance with the Philippine Grid Code, given that a load center has to pay for transmission charges.
Other issues are the change of the rates under the ancillary services procurement agreement with National Grid Corp. of the Philippines and reform in the manner by which NGCP enters into ASPAs and the possibility of taking away the responsibility from NGCP and given to a market platform.
The action plan includes the determination of a discount or refund mechanism if the Philippine Competition Commission finds that the CBK HEPPs hold a dominant market position after the plant has been bid out, procurement of a third-party consultant for the financial evaluation, assessment of the impact of the ancillary service-competitive selection process and the commercial operation of the reserve market on the privatization of the CBK HEPPs such as opportunities for selling capacity.
PSALM president Irene Garcia said earlier that the CBK is one of the big-ticket hydropower projects up for privatization, apart from Agus-Pulangi hydro project.
The CBK hydro facility consist of the 22.6-megawatt Caliraya in Lumban, the 20.8-MW Botocan in Majayjay and the 684.6-MW Kalayaan I and II in Kalayaan, Laguna.
J-Power and Sumitomo Corp. of Japan operate the CBK power plants.