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HOPING
to update power-generation rates to a comfortable level
to power operators, Suez Energy Asia, winning bidder of
the 600-megawatt Calaca coal-fired power plant, appealed
to Power Sector Assets and Liabilities Management Corp.
(PSALM) that the rate of National Power Corp. (Napocor)
be adjusted as a precondition to the closing of the
$787-million transaction.
Suez’s
lenders have expressed concern and have indicated it was
unlikely to draw down the loans for the Calaca
acquisition as Napocor’s rates, which were referred to
in the transition supply contracts, do not reflect the
true costs of electricity.
Suez’s
appeal was confirmed by the Energy Regulatory Commission
(ERC), in reference to a correspondence sent to them on
the matter.
PSALM
has set August 4 as a deadline for it (PSALM) to
complete all of its deliverables in the transaction.
The
“burden to reflect true cost of electricity” is now
being evaluated on whether it should be treated as
“government deliverables” in the Calaca deal since PSALM
viewed the concerns of the buyer and its lenders “as
valid.”
ERC
chairperson Zenaida Ducut said she wants to focus on the
review of the pending cases filed with the ERC and
determine how to speed up their resolution.
Ducut
also said she would review existing policies pertaining
to rate-setting, including the system-loss and lifeline-
charge components and the different adjustment
mechanisms that affect electricity rates.
The ERC
confirmed it has already received correspondence about
the concerns raised by the Calaca bidder on the low
rates of Napocor.
The
Calaca asset is the last transaction that has not been
closed by PSALM after its successful bidding on October
16, 2007.
Sources
said that if the government lets go of the $787 million
that should be paid for Calaca, industry watchers expect
a rebidding process will not corner the same amount
given problematic economic conditions worldwide.
But Suez
earlier said it will work on a full payment for the
Calaca transaction.
Suez
even said then that it has negotiated for loans with
various creditors, including the International Finance
Corp. for $300 million and the Asian Development Bank
for $200 million.
The
Calaca facility has been allocated a substantial 287-MW
power-supply contract, or about 48 percent of the
plant’s rated capacity, of which Manila Electric Co.
will assume the biggest portion of the contracted
energy, which is equivalent to 169 MW.
The
transition supply contract was attached to provide the
new owner a ready market for the electricity the power
plant will generate. |
