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DoE puts Malaya power plant privatization on hold

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Front view of KEPCO's Malaya thermal power plant in the Philippines -- COMMONS.WIKIMEDIA.ORG

THE Department of Energy (DoE) is putting on hold the privatization of the Malaya power plant in Rizal province until a study has been made to determine whether continued operation of the facility is feasible.

“We feel that the status quo is safer until we finish that study,” DoE Assistant Secretary Leonido J. Pulido III told reporters.

The 650-megawatt (MW) Malaya thermal power plant is run when needed to provide power to supplement the required reserves of electricity grid operator National Grid Corp. of the Philippines.

“One of the problems with Malaya is it’s costing us P8 billion to run. It’s a significant amount and we are shouldering that as consumers,” Mr. Pulido said.

DoE data show that although the plant has a rated or installed capacity of 650 MW, its dependable capacity is only 470 MW.

The plant in Pililia, Rizal is one of the remaining facilities that state-led Power Sector Assets and Liabilities Management Corp. needs to privatize as required by law.

“There has to be a further study made on two things. One, there has to be a specific study made on ancillary requirements. Meaning, do we really need to keep Malaya running as a must-run unit,” Mr. Pulido said.

“Second, the initial mandate of the [DoE] Secretary [Alfonso G. Cusi] was, in the privatization of Malaya thermal power plant there must be a requirement to convert it either as an LNG (liquefied natural gas) power plant or a coal-fired power plant,” he said.

Mr. Pulido said the delay in selling the Malaya plant is “reasonable” unless a study is made on its feasibility.

“It would be better to be delayed until we come up with a very firm policy regarding Malaya,” he said. 

He said the DoE will be coming up with a memorandum on which entity — DoE, PSALM or private sector bidders — should shoulder the cost of coming up with the study.

“Right now, honestly I think we’re leaning towards the DoE footing the bill,” he said. — Victor V. Saulon