Trail of Power Mess Leads to Ramos

Name of Plant :	Bauang Diesel Power Plant Project (A14)
Name of IPP :	Bauang Private Power Corporation
Contract Type :	Build-Operate-Transfer/Energy Conversion Agreement/Solicited
Status of Plant :	Operating
Cooperation Period :	15 years (February 1995 - February 2010)

Nature of Issue	Issue	Recommendation
Changes to Contract	Without ICC, approval, the contracted capacity was increased from 195 MW to 215 MW, allegedly "due to erroneous cover page" and the Base Capacity Rate was raised from US$14.00 per KW/mo. to US$15.12 per KW/mo.	Legal review required as to validity of amendments.
Correction to the Contract	This contract differs from other similar contracts in that the no. 1 is missing in the F (Outage) Factor definition. BPPC billed NPC for this in the past, but NPC did not pay.	To make necessary correction in the contract
	The issue is not currently relevant because of low dispatch factor but NPC needs to guard against such future claims for the remaining 8 years of cooperation period.

High Cost of IPP	BPPC's Cost (Levelized IPP Cost + Fuel is Php2.791Kwh) ranks no. 15 from overall and 7 from Bunker C type of fuel.	Review of possible improvement of fees structure, especially the Operating and Maintenance Fee (0 & M), considering that the plant is underutilized.
	BPPC ranks no. 2 (in proportion to capacity) in Net loss to NPC due to low dispatch amounting to Php 5.1 billion.

	Cumulative Return on Investment is 83% for 6 years of operation.