PSALM acquiring Casecnan service contract


Government-owned Power Sector Assets and Liabilities Management Corporation (PSALM) said on Friday that it will immediately procure an Operation and Maintenance Service Contract (OMSC) for the Casecnan Multi-Purpose Project (CMPP).

The move is to ensure the continuing operations of both the CMPP’s irrigation and 150-megawatt Hydroelectric Power Plant components after its ownership is turned over to the government this December.

Just this week, the National Irrigation Administration (NIA) agreed to allow PSALM to procure the OMSC. With the consent of the Departments of Energy and Finance, PSALM will undertake the OMSC’s purchase under Republic Act 9184 or the Government Procurement Reform Act. PSALM will then work on the terms of the CMPP’s privatization through public bidding.

The CMPP is covered by a Build-Operate-Transfer contract between NIA and CE Casecnan Water and Energy Company, the facility’s independent power producer. CE Casecnan’s commercial operations began in 2002 and is expected to end on December 11. Under the Power Purchase Agreement (PPA) between the two government entities, NIA will transfer 60% of the CMPP’s ownership to PSALM when the PPA ends.

“PSALM intends to begin the procurement of the OMSC by the second week of September 2021 through a competitive public bidding process. The contract will be effective for one year until PSALM commences and completes the plant’s privatization by the end of 2022. All proceeds from the successful privatization of the Casecnan Hydroelectric Power Plant will be divided by NIA and PSALM in accordance with their ownership interest in CMPP,” PSALM President and CEO Irene Besido-Garcia said in a statement.

The CMPP provides 19 million kilowatt-hours of hydroelectric power per month to supplement the energy supply in the Luzon Grid. It also ensures continuous irrigation services to about 139,200 hectares of farmland in Nueva Ecija, Pampanga, Bulacan and Tarlac, amounting to 58.333 million cubic meters per month in accordance with NIA-prescribed water protocols.