MANILA, Philippines - The operator of the 1,200-megawatt (MW) Ilijan Natural Gas Combined Cycle plant in Batangas has expressed misgivings on a plan to split the plant’s contracted output into two in a forthcoming government bidding, saying the contract should be auctioned as whole.

“It would be difficult to split the contract. How do you split the output?” said Rolando T. Bacani, Korea Electric Power Corp. (KEPCo) Philippines general manager.

The bidding will be for a deal to become an Independent Power Producer Administrator or IPPA, tasked to manage the plant’s output which had been contracted by state-owned National Power Corp. (Napocor).

The contracted capacity for the Ilijan plant will be auctioned in the first quarter of 2010. Last Tuesday, the IPPA contracts for the 345-MW San Roque plant in San Manuel, Pangasinan, the 70-MW Bakun in Benguet, Ilocos Sur, and the 30-MW Benguet mini-hydro facility were successfully sold.

Jose C. Ibazeta, president of the Power Sector Assets and Liabilities Management Corp. (PSALM), the agency tasked to privatize state power assets, had said the Ilijan plant’s capacity could be split into two due to its size.

Mr. Bacani said it would be difficult for the plant to prioritize under such a setup.

“How do you give priority for example if there is a power level to maintain and then one has to postpone? Who would take precedence? Operationally, it would be hard as the IPP (Independent Power Producer) contractor,” he said.

KEPCo is also looking at joining the IPPA bidding for its Ilijan plant, he said.

Mr. Ibazeta said PSALM was still studying how to go about the Ilijan IPPA auction.

Privatizing at least 70% of the IPPA contracts is one of the preconditions to usher in open access and retail competition in the power industry. PSALM has reached 44% after the sale of the hydro IPPAs Tuesday.

Conrad S. Tolentino, acting vice-president of PSALM’s asset management and electricity trading units, said the 70% threshold would be breached with the sale of the Ilijan IPPA. “Our target is early next quarter,” Mr. Tolentino said in a phone interview.

IPPA contract owners have the authority to administer the trading of power produced by the plants in the Wholesale Electricity Spot Market. The IPPA contract owners will also be responsible for procuring coal and other fuel requirements. -- Jose Bimbo F. Santos