PSALM gets nod to privatize Malaya Thermal Power Plant

State-run Power Sector Assets and Liabilities Management Corp. (PSALM) is set to finally privatize the 650-megawatt (MW) Malaya Thermal Power Plant (TPP) in Rizal after the country’s natural gas policy has been issued, a ranking Department of Energy (DOE) official said.

DOE Assistant Secretary Leonido Pulido said PSALM could now proceed to privatize the Malaya plant, which should be converted into a liquefied natural gas (LNG) or coal plant by the winning bidder, since the Philippine Downstream Natural Gas Regulation (PDNGR) has been signed by Energy Secretary Alfonso Cusi last month.

“This year might be the year that Malaya Thermal Power Plant could be privatized. (It should be) converted into LNG power plant or coal plant,” he said.

“Now that we have the PDNGR, and the creation of the review and evaluation committee for downstream natural gas, the instructions of the (DOE) secretary for PSALM, we can now proceed with the revisions of the TOR (terms of reference) for the privatization of Malaya,” Pulido said.

The PDNGR details the rules and regulations governing the downstream natural gas industry to develop a market and gain energy security and sustainability.

Earlier, DOE Undersecretary Felix William Fuentebella said PSALM is just awaiting the issuance of the natural gas policy to include it in the TOR for the privatization of the Malaya plant.

PSALM, the entity created by the Electric Power Industry Reform Act (EPIRA) to privatize government-owned assets, originally set the Malaya auction on March 8, 2017. The asset will be sold on an “as is, where is” basis.

The sale has been reset to March 30 and then deferred until further notice to take into consideration the DOE policy to ensure sufficiency of the power supply in the Luzon grid.

PSALM was directed to include in the TOR Malaya plant’s conversion from running on diesel fuel to coal or LNG to become a baseload plant.

Baseload power plants are power generating facilities that can operate reliably and efficiently generating electricity 24 hours a day, seven days a week. This can be served by coal, LNG and nuclear plants.

With the natural gas policy, Pulido said the country would now have a framework for the gas supply and supply would be secured for the Malaya plant and other upcoming LNG projects.

“We decided to suspend privatization of Malaya until we could come up with the assurance that there will be future supply and that assurance of future supply is the Philippine Downstream Natural Gas Industry Rules,” he said.