MANILA - First Gen Corp., the power generation arm of the Lopez Group, intends to bid for the contract to manage the 140-megawatt (MW) Casecnan hydroelectric power plant in Nueva Ecija province.

First Gen senior vice president Ernesto Pantangco said Casecnan would be a strategic investment for the company, which recently acquired the 112-MW Pantabangan-Masiway hydro power facilities.

"We are interested in Casecnan because it supplies water to Pantabangan, it could be a good investment," he said.

But Pantangco expressed some concerns over independent power producer administrator (IPPA) contracts being auctioned off to the private sector.

"Like in the case of Casecnan, it's not under the existing IPPA concept that we proposed. For instance, we can ask government to pre-terminate Casecnan's contract but that's not appropriate since there are loans outstanding," he explained.

Another concern is whether the new IPPA would be allowed to expand the operation of the power plant.

Nevertheless, Pantangco said they remain interested to bid for the Casecnan IPPA contract since he said they could find ways to resolve these issues.

Aside from Casecnan, the next IPPA contracts to be privatized are the 70-MW Bakun, and 95-MW San Roque hydropower plants.

Earlier, the Power Sector Assets and Liabilities Management Corp. (PSALM) tried to sell IPPA contracts attached to the 1,000-MW Sual and 700-MW Pagbilao coal-fired power plants but failed after bids fell short of the reserve price set by the government.

The bidding of Sual and Pagbilao contracts could have ushered the era of open access, wherein bulk power users will be given an option to choose where to buy their requirements.

Under the law, PSALM should be able to privatize 70 percent of Napocor generating assets in Luzon and Visayas, and 70 percent of Napocor contracts through IPPAs before open access could be allowed.

The 1,700-MW aggregate contracted capacities of Sual and Pagbilao represent only around 34.7 percent of the contracted capacity of the IPPA contracts for Luzon and Visayas.